ACCT 2331 Lecture Notes - Lecture 3: Deferred Income, General Ledger, Trial Balance

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erinbat720

2 Feb 2017

School

University of Houston

Department

Accounting

Course

ACCT 2331

Professor

Sam Goble

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Document Summary

Chapter 2: the accounting cycle: during the period. To increase revenue accounts, credit the revenue account. For every journal (chronological events affecting a company economically) entry: Journal entry should contain: describe the transaction, the date, accounts and amounts debited, accounts and amounts credited. 3 steps to analyze in effect of transactions: determine 1st account in equation that increase of decrease, determine 2nd account in equation that increase or decrease, confirm assets = liabilities + stockholders" equity (accounts must. If a transaction decreases cash (asset) by , the balance sheet will balance if: another asset is increased, a liability is decreased. Revenue services performed for customers on account. Deferred revenue cash received for service that will be performed in the future (create a liability) Internal transaction doesn"t include an exchange with separate economic entity. External transaction a company and a separate company or individual (steps for all remaining chapters in the book)

Related Questions

1. Total each column of the special journals. Show that thetotal debits equal the total credits in each special journal.

2. Balance or reconcile the amounts receivable subsidiary ledgerand accounts receivable in the general ledger. Do the same for theaccounts payabel subsidiary ledger and accounts payable in thegeneral ledger.

SalesJournal PAGE 7
DATE		INVOICE NO.	ACCOUNTS DEBITED	POST. REF.	ACCOUNTS RECEIVABLE DR. SALES REVENUE CR.	COST OF GOODS SOLD DR. INVENTORY CR.
July	2	913	Ishikawa Corp		24600	10800
July	9	914	Bell Ltd		33300	13860
July	15	915	M.O.Brown		3990	1440
July	18	916	Ishikawa Corp		2142	762
July	29	917	Bell Ltd		2976	1320

Cash ReceiptsJournal PAGE 5
		DEBITS		CREDITS					COST OF GOODS SOLD DR. INVENTORY CR.
						OTHER ACCOUNTS
DATE		CASH	SALES DISCOUNTS	ACCOUNTS RECEIVABLE	SALES REVENUE	ACCOUNT TITLE	POST. REF.	AMOUNT
July	5	6462			6462	Cash sales			2880
July	8	6650				Interest revenue		6650
July	9	32967	333	33300		Bell Ltd
July	12	24354	246	24600		Ishikawa Corp
July	31	2142		2142		Ishikawa Corp

Req.

PurchasesJournal PAGE 10

CREDITS

DEBITS

OTHER ACCOUNTS

DATE

ACCOUNT CREDITED

INVOICE DATE

TERMS

POST REF.

ACCOUNTS PAYABLE

INVENTORY

SUPPLIES

ACCOUNT TITLE

POST. REF.

AMOUNT

July

Nakkach

14802

July

Burgess

12282

July

Manley

8050

Cash PaymentsJournal PAGE 8
					DEBITS		CREDITS
DATE		CHQ. NO.	ACCOUNTS DEBITED	POST REF.	OTHER ACCOUNTS	ACCOUNTS PAYABLE	INVENTORY	CASH
July	5		Furniture					13110
July	10		Purchases					6858
July	13		Nakkach			14802		14358
July	22		Prepaid insurance					6000
July	25		Utilities					6718
July	30		Manley Inc			8050		7889
July	31		Salaries					14082

Accounts Receivable SubsidiaryLedger

ACCOUNT BELLLTD.
DATE		ITEM	JRNL. REF.	DEBIT	CREDIT	BALANCE
July	9	Bell Ltd	6	33300		33300
July	19	Bell Ltd	13	32967		32967
July	19	Bell Ltd Discount	13		333	333
July	29	Bell Ltd	21	2976		2976

ACCOUNT M.O.BROWN
DATE		ITEM	JRNL. REF.	DEBIT	CREDIT	BALANCE
July	15	M.O.Brown (credit sale)	11	3990		3990
July	15	M.O.Brown (Sold to)	11		1440	1440

ACCOUNT ISHIKAWAINC.
DATE		ITEM	JRNL. REF.	DEBIT	CREDIT	BALANCE
July	2	Ishikawa Inc (credit sale)	1	24600		24600
July	10	Ishikawa Inc (discount)	8	246		246
July	10	Ishikawa Inc	8		24354	-24354
July	18	Ishikawa Inc (credit sale)	13		2142	-2142

Accounts Payable SubsidiaryLedger

ACCOUNT BURGESSDISTRIBUTINGLTD.
DATE		ITEM	JRNL. REF.	DEBIT	CREDIT	BALANCE
July	15	Burgess Distribution Ltd (Purchases)	15		$12,282	-$12,282

ACCOUNT NAKKACHCORP.
DATE		ITEM	JRNL. REF.	DEBIT	CREDIT	BALANCE
July	3	Nakkach Corp (purchase of inventory)	2		$14,802	-$14,802
July	13	Nakkach Corp (Discount)	9	$444.06		$444.06
July	22	Nakkach Corp (Furniture Purchase)	16		$3870	-$3870

ACCOUNT MANLEY,INC.
DATE		ITEM	JRNL. REF.	DEBIT	CREDIT	BALANCE
July	13	Manley Inc (Purchase of supplies)	10		$8646	-$8646
July	28	Manley Inc	19		$805	-$805
July	29	Manley Inc (Return)	20	$4050		$4050

pucecockroach350

Meyer Corporation sells computers and provides computer repairservices. The balances in the General Ledger accounts as of 4/1/15are as follow:

Cash	$ 30,000	Notes Payable	$ 15,500
Accounts Receivable	17,000	Contributed Capital	63,000
Inventory	8,000	Retained Earnings	45,700
Prepaid Advertising	2,500	Sales Revenue
Building	39,000	Repair Service Revenue
Land	28,000	Cost of Goods Sold (COGS)
Equipment	20,000	Advertising Expense
Accounts Payable	13,000	Salary Expense
Unearned Revenue	$7,300

The business transactions for April are shownbelow:

APRIL

2 Meyer invested$80,000 cash into the business and contributed $100,000 worth ofequipment in exchange for stock.

4 Land and buildingwere purchased for $185,000. Of this amount, $90,000 applied to theland, and $95,000 to the building. The corporation paid $50,000 incash and financed the remaining balance with debt by signing a notepromising to pay in four years.

7 Purchased $10,000of computer inventory for the business on account.

10 Sold computers to customers for $20,000 receiving the entire amountin cash. The computers cost $15,000 (Hint: There are four accountsin this journal entry)

14 Received $7,000from a customer on previously billed repair services

18 Meyers Corporationbilled customers $15,000 for repair services rendered. Of thisamount, $8,500 was received in cash, and the balance was billed onaccount.

21 Paid $8,000 ofaccounts payable that had become due.

24 Paid $7,000 forseveral television advertisements aired in April

27 Received a check froma customer for $6,000 for repair services to be rendered in May

30 Paid employees $15,500 insalaries to employees for work done during the month.

Submit all your answers to D2L in one Exceldocument.

Prepare journal entries for each transaction (list the date,accounts and amounts debited and credited in good form).

	Accounts	Debit	Credit
April 1	Cash (+A)	$500,000
	Contributed Capital (+SE)		$500,000
To record purchase of additional shares of stock

Create T- account for each account used with the beginningbalance provided. Post each transaction from Question 1 to theappropriate T account and determine the ending balance as of April30.

Prepare a trial balance dated April 30, 2015 (see page 64 intextbook). Use the âSumâ function in Excel to addup your debit and credit columns.

Prepare an income statement for the period ended April 30, 2015.Does April appear to be a profitable month for Meyer Corporation?What is one suggestion you would make to increase the profitabilityof the business?

Prepare a balance sheet as of April 30, 2015. Use theâSumâ function in Excel for your totals.(Remember: Ending Retained Earnings = BeginningRetained Earnings + Net Income â Dividends)

salmonhound524

QUESTION 21 A journal entry for a $75 payment for Rent expensewas posted as a debit to Salary expense and a credit to Cash. Thiserror will cause which of the following conditions on the trialbalance? A. The sum of the credits will equal the sum of thedebits. B. The sum of the debits will exceed the sum of the creditsby $75. C. The sum of the credits will exceed the sum of the debitsby $150. D. The sum of the debits will exceed the sum of thecredits by $150.

QUESTION 22 The business receives cash from a customer that isowed to the company "on account," based on services rendered to thecustomer previously. How does the collection of the cash affect theaccounting equation? A. Assets increase; owner's equity increases.B. Assets increase; liabilities increase. C. Assets decrease;owner's equity decreases. D. One asset increases; one assetdecreases

QUESTION 23 A business completes service to a client and sendsout a sales invoice. The amount will be collected from the customerat a later time. Which of the following would be TRUE at the timewhen the invoice is sent out? A. Total assets will decrease. B. Netincome will increase. C. Owner's equity will decrease. D. Totalliabilities will increase.

QUESTION 24 Which of the following accounts increases with adebit? A. Cash B. Interest Payable C. Accounts Payable D. Smith,Capital

QUESTION 25 The Accounts Receivable account of Nuptials Inc. isshown below. Accounts Receivable Dr Cr 26,000 3,500 5,000 Calculatethe ending balance of the account. A. $33,500 debit B. $31,000,debit C. $3,500, credit D. $27,500, debit

QUESTION 26 The following transactions for the month of Marchhave been journalized and posted to the proper accounts. Mar. 1Martinez invested $9,000 cash in his new design services business.Mar. 2 Paid the first month's rent of $800. Mar. 3 Purchasedequipment by paying $3,000 cash and executing a note payable for$5,000. Mar. 4 Purchased office supplies for $750 cash. Mar. 5Billed a client for $10,000 of design services completed. Mar. 6Received $8,000 on account for the services previously recorded.What is the balance in Cash? A. $13,250 B. $12,450 C. $15,450 D.$14,000

QUESTION 27 Which of the following sequences states the order inwhich a trial balance lists accounts? A. Equity â Assets âLiabilities B. Liabilities â Assets â Equity C. Assets â Equity âLiabilities D. Assets â Liabilities â Equity

QUESTION 28 Which of the following statements is FALSE? A. Atrial balance shows total amounts for assets, liabilities, andequity. B. A trial balance is created before the balance sheet isprepared. C. A trial balance presents data in debit and creditformat, but a balance sheet does not. D. A trial balance showstotal debits and total credits.

QUESTION 29 A promise received from a business's customers topay for goods and services that they received from the business iscalled a(n): A. revenue. B. account receivable. C. account payable.D. expense.

QUESTION 30 You can evaluate the economic resources, debt, andoverall financial position of a company in which of the followingfinancial statements? A. Income statement B. Balance sheet C.Statement of owner's equity D. Statement of cash flows

QUESTION 31 A book holding all of the accounts is called the: A.income statement. B. journal. C. ledger. D. balance sheet.

QUESTION 32 Which of the following groups of accounts BOTHnormally have a debit balance? A. Assets and Liabilities B.Liabilities and Owner's equity C. Revenues and Expenses D. Assetsand Expenses

QUESTION 33 A business buys $500 of supplies on account. Whichaccount is debited? A. Supplies B. Cash C. Service revenue D.Accounts payable

ACCT 2331 Lecture Notes - Lecture 3: Deferred Income, General Ledger, Trial Balance

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