Note to FSZ

Thank you for your kind comments, and thank you for the offer, I would like to add you as a contributor to this blog, so if you send me your email address, please email me at joonbugxx@yahoo.com I'd like to add you as a contributor

Thank you

Exercise 1D

Here's Exercise 1D, to view the video click HERE
To download click HERE
ID: uolexternalstudent
p/w: lseexternal

Please see below for the answers & short explanation

Exercise 1D

Get your own at Scribd or explore others:

Answers:

Exercise 1D Answers

Publish at Scribd or explore others:

a) It's a liability, so any liability has to be credited.
b) Accounts Receivable, based on accrual basis accounting, this is a revenue that is expected, so it's a debit to assets.
c) Cash, always a debit to assets.
d) Capital Stock is an Owner's Equity account, this makes the owner richer (well, I guess not in today's economic climate, LOL), anyways, anything that enriches the owner will be a credit.
e) Dividends is an owner's equity that has the opposite effect of enriching the owner therefore, if credit enriches an owner, any cash outlay or decrease in owner's equity will have to be debited.
f) Equipment is an asset, therefore a debit to asset.
g) Fees Earned (aka Revenue), is always a credit.
h) Rent Expense, any expenses has the opposite effect of enriching the owner therefore debit the owner's equity account.
i) Salary Expense, once again the key word is "EXPENSE", thus decreasing the owner's equity, thus debiting the OE
j) Supplies is an asset and to increase assets, we must always debit.

Exercise 1C

For the accompanying video, click HERE
To download the doc, click HERE
use the following:
ID: uolexternalstudent
p/w: lseexternal
The answers are at the bottom, work it out first please!!!

Exercise 1C

Get your own at Scribd or explore others:


Answers:

Answers to Exercise 1C

Publish at Scribd or explore others:

A) Income Statement
B) Balance Sheet (keyword -= inventory)
C) Balance Sheet (payable = liability)
D) Sales/Revenue = Income Statement
E) Balance Sheet (Assets)
F) Balance Sheet (Assets)
G) Income Statement (Expense - keyword)
H) Balance Sheet (payable = liability)
I) Balance Sheet (short term assets)
J) Balance Sheet (debt = liability)
K) Income Statement (expense)
L) Balance Sheet (Owner's Equity account)
M) Balance Sheet

T-Account

This is an old school tool they used to use in accounting prior to journal posting, hope this is helpful.

To download, click HERE
ID: uolexternalstudent
p/w: lseexternal

T Bar

Get your own at Scribd or explore others:

Exercise 1B

For the accompanying video, click HERE
To download the doc, click HERE
use the following:
ID: uolexternalstudent
p/w: lseexternal
The answers are at the bottom, work it out first please!!!

Exercise 1B

Get your own at Scribd or explore others:

Answers:
1. C - Cash is received, which would increase the asset, since it was a revenue, it increases owner's equity.
2. D - Cash is an asset, so by paying cash, we reduce our asset. An obligation to a creditor is a liability, so by paying/fulfilling our obligation to the credit, we also reduce our liability (obligation) to the creditor.
3. C - Cash, once again is an asset, and stock is an owner's equity.
4. E - Think of Expense as decreasing Owner's equity, and a decrease in cash is a decrease in assets.
5. E - This is a kind of trick question, INTEREST was paid, not the PRINCIPLE, if PRINCIPLE was paid then we would be lowering the obligation (liability) to the creditor, but INTEREST is an expense on the PRINCIPLE, so by paying only the INTEREST, we are not lowering the obligation, thus INTEREST is an EXPENSE, thus lowering Owner's equity and since we're paying cash, also lowering ASSET. I got caught on this one too!!!!!!!
6. A - When supplies are initially purchased with cash, the asset (cash) decreases and supplies (asset) increases, therefore it's a simultaneous increase and decrease in asset (+ supply, - cash).
7. E - Rent is an expense, remember expense lowers owner's equity, and since it's being paid by cash (check is also considered cash), asset is also decreased.
8. B - Borrowing money will also increase cash which increases asset, and since an obligation developed, then a liability increases.
9.E - Consumption of supplies is an expense, which means it decreases owner's equity and since all the supplies are used up (consumed), then asset also decreases (kind of a trick question).
10. E - Paying out cash will lower asset and owner's equity.

Exercise 1A

For the accompanying video, click HERE
To download the doc, click HERE
use the following:
ID: uolexternalstudent
p/w: lseexternal

I will post the answer and the explanation later.

Exercise 1A

Get your own at Scribd or explore others:

Answers:

Exercise 1A Answers

Publish at Scribd or explore others:

Transaction A:
Since cash is received cash goes up, and since capital stock is an Owner's Equity account, it goes up along with cash.

Transaction B:
Any time cash is received assets always goes up, services performed is how revenues are gained, therefore revenues increase owner's equity.

Transaction C:
Supplies are an asset, so assets will increase and since it was paid for by cash, it will decrease the cash also.

Transaction D:
Utilities are paid for by cash therefore assets (cash) will decrease, and expenses will also decrease owner's equity.

Transaction E:
Cash borrowed will increase assets (cash) and increase obligation (liabilities).