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5. State the rules of debit and credit as applied to (a) asset accounts, (b)
liability accounts, and (c) equity accounts (revenue, expenses, dividends,
share capital—ordinary, and retained earnings).
a. Asset account
Increase (+) = Debit
Decrease (-) = Kredit
b. Liability accounts
Increase (+) = Kredit
Decrease (-) = Debit
c. Equity accounts
Revenue
Increase (+) = Kredit
Decrease (-) = Debit
Expenses
Increase (+) = Debit
Decrease (-) = Kredit
Dividends
Increase (+) = Debit
Decrease (-) = Kredit
Retained earnings
Increase (+) = Kredit
Decrease (-) = Debit
6. What is the normal balance for each of the following accounts? (a)
Accounts Receivable. (b) Cash. (c) Dividends. (d) Accounts Payable. (e)
Service Revenue. (f) Salaries and Wages Expense. (g) Share Capital—
Ordinary.
a. Asset account
Normal balance = Debit
b. Liability accounts
Normal balance = Kredit
c. Equity accounts
Revenue
Normal balance = Kredit
Expenses
Normal balance = Debit
Dividends
Normal balance = Debit
Retained earnings
Normal balance = Kredit
BRIEF EXERCISES
BE2-4 Tim Weber, a fellow student, is unclear about the basic steps in the
recording process. Identify and briefl y explain the steps in the order in which
they occur.
1. Analyze each transaction. In this step, business documents are
examined to determine the effects of the transaction on the
accounts.
2. Enter each transaction in a journal. This step is called
journalizing and it results in making a chronological record of
the transactions.
3. Transfer journal information to ledger accounts. This step is
called posting. Posting makes it possible to accumulate the
effects of journalized transactions on individual accounts.
BE2-5 J.A. Motzek Inc. has the following transactions during August of the
current year. Indicate (a) the effect on the accounting equation and (b) the debit-
credit analysis illustrated on pages 63–68 of the text.
Aug.
1. Opens an offi ce as a fi nancial advisor, investing R$5,000 in cash in
exchange forordinary shares.
4. Pays insurance in advance for 6 months, R$1,800 cash.
16. Receives R$1,100 from clients for services provided.
27. Pays secretary R$1,000 salary.
Answer :
a) The effect on the accounting equation
Aug.
1. The asset Cash is increased; the owner’s equity account Owner’s
Capital is increased.
4. The asset Prepaid Insurance is increased; the asset Cash is decreased.
16. The asset Cash is increased; the revenue Service Revenue is
increased.
27.The expense Salaries and Wages Expense is increased; the asset Cash
is decreased.
BE2-6 Using the data in BE2-5, journalize the transactions. (You may omit
explanations.)
J.A. Motzek Inc.
General Journal
August 2020
Answer :
Account Debited Account Credited
Transaction (a) (b) (c) (d) (a) (b) (c) (d)
Basic Specific Effect Normal Basic Specific Effect Normal
Type Account Balance Type Account Balance
Jan. 2 Asset Cash Increase Debit Equity Share Increase Credit
Capital
3 Asset Equipment Increase Debit Asset Cash Decrease Debit
9 Asset Supplies Increase Debit Liabili Account Increase Credit
ty Payable
11 Asset Account Increase Debit Equity Service Increase Credit
Receivable Revenue
16 Equity Adeversiting Increase Debit Asset Cash Decrease Debit
Expense
20 Asset Cash Increase Debit Asset Account Decrease Debit
Receivab
le
23 Liabili Account Decrease Kredit Asset Cash Decrease Debit
ty Payable
28 Equity Devidens Increase Debit Asset Cash Decrease Debit
PROBLEMS: SET A
P2-2A Kara Shin is a licensed accountant. During the first month of operations
of her business, Kara Shin, Inc., the following events and transactions occurred.
May
1 Shareholders invested €20,000 cash in exchange for ordinary shares.
2 Hired a secretary-receptionist at a salary of €2,000 per month.
3 Purchased €1,500 of supplies on account from Hartig Supply Company.
7 Paid office rent of €900 cash for the month.
11 Completed a tax assignment and billed client €2,800 for services provided.
12 Received €3,500 advance on a management consulting engagement.
17 Received cash of €1,200 for services completed for Lucille Co.
31 Paid secretary-receptionist €2,000 salary for the month.
31 Paid 40% of balance due Hartig Supply Company.
Kara uses the following chart of accounts: No. 101 Cash, No. 112 Accounts
Receivable, No. 126 Supplies, No. 201 Accounts Payable, No. 209 Unearned
Service Revenue, No. 311 Share Capital—Ordinary, No. 400 Service Revenue,
No. 726 Salaries and Wages Expense, and No. 729 Rent Expense.
Instructions
(a) Journalize the transactions.
(b) Post to the ledger accounts.
(c) Prepare a trial balance on May 31, 2014.
Answer :
a)
Kara Shin, Inc.
General Journal
May 2014
b)
Kara Shin, Inc.
Ledger
May 2014
Cash 101
Date Explanation Ref. Debit Credit Balance
2014
May 1 20,000 20,000
7 900 19,100
12 3,500 22,600
17 1,200 21,800
31 2,000 19,800
31 600 19,200
Supplies 126
Date Explanation Ref. Debit Credit Balance
2014
May 3 1,500 1,500
Accounts Payable 201
Date Explanation Ref. Debit Credit Balance
2014
May 3 1,500 1,500
31 600 900
Debit Kredit
Cash € 19,200
Accounts Receivable 2,800
Supplies 1,500
Account Payable € 900
Unearned Service Revenue 3,500
Share Capital 20,000
Service Revenue 4,000
Salaries and Wages Expense
Rent Expense 2,000
900
26,400
FINANCIAL STATEMENTS
Agen travel Toba Lake memiliki 10 transaksi di bulan April 2015, bulan pertama operasi.
Transaksi dicatat dalam akun-T berikut ini:
1. Income Statement
Revenues
Service revenue 19.500
Expenses
Operational expenseRent expense 5.200
Total expenses 5.200
Net income 14.300
Assets
Equipment 25.000
Supplies 2.000
Accounts receivable 8.500
Cash 62.300
Total assets 97.800
Equity and Liabilities
Equity
Share capital—ordinary 75.000
Retained earnings 9.300 84.300
Liabilities
Accounts payable 13.500
Total equity and liabilities 97.800