FinancialAccounting-OP_YioY6nY-40

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EA12. 3.4 Identify whether each of the following transactions would be recorded with a debit (Dr) or credit
(Cr) entry.
Debit or credit?
A. Equipment decrease
B. Common Stock Sold increase
C. Gas and Oil Expense increase
D. Service revenue decrease
E. Miscellaneous Expense decrease
F. Bonds Payable decrease
Table 3.8
EA13. 3.4 Identify whether ongoing transactions posted to the following accounts would normally have only
debit entries (Dr), only credit entries (Cr), or both debit and credit entries (both).
Type of entry
A. Accounts Payable
B. Cash
C. Gas and Oil Expense
D. Rent Revenue
E. Supplies Expense
F. Common Stock
Table 3.9
EA14. 3.5 Determine whether the balance in each of the following accounts increases with a debit or a
credit.
A. Cash
B. Common Stock
C. Equipment
D. Accounts Payable
E. Fees Earned
F. Electricity Expense
186 Chapter 3 Analyzing and Recording Transactions
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EA15. 3.5 Journalize for Harper and Co. each of the following transactions or state no entry required and
explain why. Be sure to follow proper journal writing rules.
A. A corporation is started with an investment of $50,000 in exchange for stock.
B. Equipment worth $4,800 is ordered.
C. Office supplies worth $750 are purchased on account.
D. A part-time worker is hired. The employee will work 15–20 hours per week starting next Monday at a
rate of $18 per hour.
E. The equipment is received along with the invoice. Payment is due in three equal monthly installments,
with the first payment due in sixty days.
EA16. 3.5 Discuss how each of the following transactions for Watson, International, will affect assets,
liabilities, and stockholders’ equity, and prove the company’s accounts will still be in balance.
A. An investor invests an additional $25,000 into a company receiving stock in exchange.
B. Services are performed for customers for a total of $4,500. Sixty percent was paid in cash, and the
remaining customers asked to be billed.
C. An electric bill was received for $35. Payment is due in thirty days.
D. Part-time workers earned $750 and were paid.
E. The electric bill in “C” is paid.
EA17. 3.5 For each item that follows, indicate whether a debit or a credit applies.
A. increase in prepaid insurance
B. increase in utilities expense
C. increase in commissions earned
D. increase in supplies
E. decrease in retained earnings
F. decrease in income taxes payable
G. increase in unearned revenue
H. increase in salaries expense
I. decrease in notes receivable
J. increase in common stock
EA18. 3.5 Indicate whether each account that follows has a normal debit or credit balance.
A. Unearned Revenue
B. Office Machines
C. Prepaid Rent
D. Cash
E. Legal Fees Earned
F. Salaries Payable
G. Dividends
H. Accounts Receivable
I. Advertising Expense
J. Retained Earnings
Chapter 3 Analyzing and Recording Transactions 187
EA19. 3.5 A business has the following transactions:
• The business is started by receiving cash from an investor in exchange for common stock $20,000
• The business purchases supplies on account $500
• The business purchases furniture on account $2,000
• The business renders services to various clients on account totaling $9,000
• The business pays salaries $2,000
• The business pays this month’s rent $3,000
• The business pays for the supplies purchased on account.
• The business collects from one of its clients for services rendered earlier in the month $1,500.
What is total income for the month?
EA20. 3.5 Prepare journal entries to record the following transactions.
A. January 22, purchased, an asset, merchandise inventory
B. on account for $2,800.
C. February 10, paid creditor for part of January 22 purchase, $1,600
EA21. 3.5 Prepare journal entries to record the following transactions.
A. July 1, issued common stock for cash, $15,000
B. July 15, purchased supplies, on account, $1,800
C. July 25, billed customer for accounting services provided, $950
EA22. 3.5 Prepare journal entries to record the following transactions.
A. March 1, purchased land for cash, $20,000
B. March 11, purchased merchandise inventory, on account, $18,500
C. March 15, Sold merchandise to customer for cash, $555
EA23. 3.5 Post the following February transactions to T-accounts for Accounts Receivable and Cash,
indicating the ending balance (assume no beginning balances in these accounts).
A. provided legal services to customers for cash, $5,600
B. provided legal services to customers on account, $4,700
C. collected cash from customer accounts, $3,500
EA24. 3.5 Post the following November transactions to T-accounts for Accounts Payable and Inventory,
indicating the ending balance (assume no beginning balances in these accounts).
A. purchased merchandise inventory on account, $22,000
B. paid vendors for part of inventory purchased earlier in month, $14,000
C. purchased merchandise inventory for cash, $6,500
EA25. 3.6 Prepare an unadjusted trial balance, in correct format, from the alphabetized account
information as follows. Assume all accounts have normal balances.
188 Chapter 3 Analyzing and Recording Transactions
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B Exercise Set B
EB1. 3.1 Match the correct term with its definition.
A. Financial
Accounting
Standards Board
(FASB)
i. used by the FASB, which is a set of concepts that guide financial reporting
B. generally
accepted
accounting
principles (GAAP)
ii. independent, nonprofit organization that sets financial accounting and reporting
standards for both public- and private-sector businesses that use generally accepted
accounting principles (GAAP) here in the United States
C. Securities and
Exchange
Commission
(SEC)
iii. standards, procedures, and principles companies must follow when preparing
their financial statements
D. conceptual
framework
iv. assumes a business will continue to operate in the foreseeable future
E. going concern
assumption
v. independent federal agency protecting the interests of investors, regulating stock
markets, and ensuring companies adhere to GAAP requirements
F. time period
assumption
vi. companies can present useful information in shorter time periods such as years,
quarters, or months
EB2. 3.2 Consider the following accounts and determine if the account is an asset (A), a liability (L), or
equity (E).
A. Accounts Receivable
B. Sales Revenue
C. Land
D. Unearned Revenue
EB3. 3.2 Provide the missing amounts of the accounting equation for each of the following companies.
Chapter 3 Analyzing and Recording Transactions 189
EB4. 3.3 From the following list, identify which items are considered original sources:
A. accounts receivable
B. receipt from post office for post office box
C. purchase order
D. general ledger
E. adjusted trial balance
F. statement of retained earnings
G. electric bill
H. packing slip
I. company expense account
J. statement of cash flows
EB5. 3.4 Indicate what impact the following transactions would have on the accounting equation, Assets =
Liabilities + Equity.
Impact 1 Impact 2
A. Paid this month’s utility bill
B. Purchased supplies for cash
C. Received cash for services performed
D. Collected cash from customer accounts receivable
E. Paid creditors on account
Table 3.10
EB6. 3.4 For the following accounts indicate whether the normal balance is a debit or a credit.
A. Unearned Revenue
B. Interest Expense
C. Rent Expense
D. Rent Revenue
E. Accounts Payable
F. Cash
G. Supplies
H. Accounts Payable
I. Equipment
J. Utilities Expense
190 Chapter 3 Analyzing and Recording Transactions
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	Chapter 3. Analyzing and Recording Transactions
	Exercise Set B