ACCT 2301 Week 2

Ques 1

For each of the following accounts indicate the effects of a debit and a credit on the accounts and the normal balance of the account.

Your answer is correct.

June 1

Sheldon Cooper invests $4,000 cash in exchange for shares of common stock in a small welding business.

2

Purchases equipment on account for $1,200.

3

$800 cash is paid to landlord for June rent.

12

Bills P. Leonard $300 after completing welding work done on account.

Account Debited

Account Credited

June 1

Cash Investment Service Revenue Equipment Depreciation Expense Accounts Payable Rent Revenue Common Stock Rent Expense Accounts Receivable

Equipment Accounts Payable Accounts Receivable Rent Expense Investment Service Revenue Cash Rent Revenue Depreciation Expense Common Stock

2

Service Revenue Equipment Rent Expense Accounts Payable Accounts Receivable Rent Revenue Common Stock Investment Cash Depreciation Expense

Cash Accounts Payable Depreciation Expense Common Stock Equipment Rent Expense Accounts Receivable Service Revenue Investment Rent Revenue

3

Accounts Receivable Investment Accounts Payable Rent Revenue Service Revenue Cash Depreciation Expense Common Stock Equipment Rent Expense

Investment Cash Common Stock Rent Expense Depreciation Expense Equipment Rent Revenue Accounts Payable Accounts Receivable Service Revenue

12

Accounts Receivable Accounts Payable Equipment Depreciation Expense Cash Service Revenue Investment Rent Revenue Common Stock Rent Expense

Equipment Accounts Payable Cash Accounts Receivable Rent Revenue Investment Rent Expense Depreciation Expense Service Revenue Common Stock

1.

An account is an accounting record of either a specific asset or a specific liability.

1.true

2.false

2.

An account shows only increases, not decreases, in the item it relates to.

1.true

2.false

3.

Some items, such as cash and accounts receivable, are combined into one account.

1.true

2.false

4.

An account has a left, or credit side, and a right, or debit side.

1.true

2.false

5.

A simple form of an account consisting of just the account title, the left side, and the right side, is called a T-account.

1.true

2.false

Selected transactions for L. Takemoto, an interior decorating firm, in its first month of business, are shown below

For each transaction indicate the following.