Selected transactions for Front Room, an interior decorator corporation, in its first month of business, are as follows. 1. Issued stock to investors for $16,600 in cash. 2. Purchased used car for $10,700 cash for use in business. 3. Purchased supplies on account for $200. 4. Billed customers $4,860 for services performed. 5. Paid $290 cash for advertising start of the business. 6. Received $1,570 cash from customers billed in transaction (4). 7. Paid creditor $410 cash on account. 8. Paid dividends of $350 cash to stockholders Expense, Service Revenue, etc.); whether the specific account is increased or decreased; and the normal balance of the specific account. Account Debited Account Credited No. Basic Type Specific Account Effect Normal Balance Basic Type Specific Account Effect Normal Balance 1. Asset Cash Increase Debit Stockholders’ Equity Common Stock Increase Credit 2. choose a basic type Stockholders’ EquityLiabilityAsset choose a specific account Accounts PayableService RevenueCashEquipmentSuppliesAccounts ReceivableAdvertising ExpenseDividends select between increase and decrease IncreaseDecrease select between debit and credit CreditDebit choose a basic type AssetStockholders’ EquityLiability choose a specific account Accounts ReceivableCashService RevenueSuppliesAdvertising ExpenseAccounts PayableDividendsEquipment select between increase and decrease IncreaseDecrease select between debit and credit DebitCredit 3. choose a basic type Stockholders’ EquityAssetLiability choose a specific account Accounts ReceivableAdvertising ExpenseAccounts PayableCashDividendsSuppliesService RevenueEquipment select between increase and decrease IncreaseDecrease select between debit and credit CreditDebit choose a basic type AssetStockholders’ EquityLiability choose a specific account DividendsAccounts PayableAdvertising ExpenseSuppliesEquipment CashService RevenueAccounts Receivable select between increase and decrease IncreaseDecrease select between debit and credit DebitCredit 4. choose a basic type Stockholders’ EquityLiabilityAsset choose a specific account DividendsAccounts ReceivableEquipmentAdvertising ExpenseSuppliesAccounts PayableService RevenueCash select between increase and decrease DecreaseIncrease select between debit and credit CreditDebit choose a basic type LiabilityAssetStockholders’ Equity choose a specific account Equipment Accounts PayableSuppliesDividendsCashService RevenueAdvertising ExpenseAccounts Receivable select between increase and decrease IncreaseDecrease select between debit and credit CreditDebit 5. choose a basic type LiabilityAssetStockholders’ Equity choose a specific account Accounts ReceivableAccounts PayableDividendsService RevenueAdvertising ExpenseSuppliesEquipmentCash select between increase and decrease DecreaseIncrease select between debit and credit DebitCredit choose a basic type Stockholders’ EquityLiabilityAsset choose a specific account Service RevenueDividendsEquipment Accounts PayableCashAccounts ReceivableAdvertising ExpenseSupplies select between increase and decrease DecreaseIncrease select between debit and credit DebitCredit 6. choose a basic type Stockholders’ EquityLiabilityAsset choose a specific account Accounts PayableService RevenueCashAdvertising ExpenseEquipmentSuppliesAccounts ReceivableDividends select between increase and decrease DecreaseIncrease select between debit and credit CreditDebit choose a basic type Stockholders’ EquityLiabilityAsset choose a specific account Advertising ExpenseEquipment Accounts ReceivableService RevenueDividendsAccounts PayableSuppliesCash select between increase and decrease DecreaseIncrease select between debit and credit DebitCredit 7. choose a basic type LiabilityStockholders’ EquityAsset choose a specific account Advertising ExpenseAccounts PayableDividendsService RevenueSuppliesAccounts ReceivableCashEquipment select between increase and decrease IncreaseDecrease select between debit and credit CreditDebit choose a basic type Stockholders’ EquityLiabilityAsset choose a specific account DividendsEquipment SuppliesCashService RevenueAccounts ReceivableAccounts PayableAdvertising Expense select between increase and decrease DecreaseIncrease select between debit and credit CreditDebit 8. choose a basic type LiabilityStockholders’ EquityAsset choose a specific account SuppliesCashEquipmentAccounts PayableAccounts ReceivableDividendsAdvertising ExpenseService Revenue select between increase and decrease IncreaseDecrease select between debit and credit DebitCredit

Selected transactions for Front Room, an interior decorator corporation, in its first month of business, are as follows. 1. Issued stock to investors for $16,600 in cash. 2. Purchased used car for $10,700 cash for use in business. 3. Purchased supplies on account for $200. 4. Billed customers $4,860 for services performed. 5. Paid $290 cash for advertising start of the business. 6. Received $1,570 cash from customers billed in transaction (4). 7. Paid creditor $410 cash on account. 8. Paid dividends of $350 cash to stockholders Expense, Service Revenue, etc.); whether the specific account is increased or decreased; and the normal balance of the specific account. Account Debited Account Credited No. Basic Type Specific Account Effect Normal Balance Basic Type Specific Account Effect Normal Balance 1. Asset Cash Increase Debit Stockholders’ Equity Common Stock Increase Credit 2. choose a basic type Stockholders’ EquityLiabilityAsset choose a specific account Accounts PayableService RevenueCashEquipmentSuppliesAccounts ReceivableAdvertising ExpenseDividends select between increase and decrease IncreaseDecrease select between debit and credit CreditDebit choose a basic type AssetStockholders’ EquityLiability choose a specific account Accounts ReceivableCashService RevenueSuppliesAdvertising ExpenseAccounts PayableDividendsEquipment select between increase and decrease IncreaseDecrease select between debit and credit DebitCredit 3. choose a basic type Stockholders’ EquityAssetLiability choose a specific account Accounts ReceivableAdvertising ExpenseAccounts PayableCashDividendsSuppliesService RevenueEquipment select between increase and decrease IncreaseDecrease select between debit and credit CreditDebit choose a basic type AssetStockholders’ EquityLiability choose a specific account DividendsAccounts PayableAdvertising ExpenseSuppliesEquipment CashService RevenueAccounts Receivable select between increase and decrease IncreaseDecrease select between debit and credit DebitCredit 4. choose a basic type Stockholders’ EquityLiabilityAsset choose a specific account DividendsAccounts ReceivableEquipmentAdvertising ExpenseSuppliesAccounts PayableService RevenueCash select between increase and decrease DecreaseIncrease select between debit and credit CreditDebit choose a basic type LiabilityAssetStockholders’ Equity choose a specific account Equipment Accounts PayableSuppliesDividendsCashService RevenueAdvertising ExpenseAccounts Receivable select between increase and decrease IncreaseDecrease select between debit and credit CreditDebit 5. choose a basic type LiabilityAssetStockholders’ Equity choose a specific account Accounts ReceivableAccounts PayableDividendsService RevenueAdvertising ExpenseSuppliesEquipmentCash select between increase and decrease DecreaseIncrease select between debit and credit DebitCredit choose a basic type Stockholders’ EquityLiabilityAsset choose a specific account Service RevenueDividendsEquipment Accounts PayableCashAccounts ReceivableAdvertising ExpenseSupplies select between increase and decrease DecreaseIncrease select between debit and credit DebitCredit 6. choose a basic type Stockholders’ EquityLiabilityAsset choose a specific account Accounts PayableService RevenueCashAdvertising ExpenseEquipmentSuppliesAccounts ReceivableDividends select between increase and decrease DecreaseIncrease select between debit and credit CreditDebit choose a basic type Stockholders’ EquityLiabilityAsset choose a specific account Advertising ExpenseEquipment Accounts ReceivableService RevenueDividendsAccounts PayableSuppliesCash select between increase and decrease DecreaseIncrease select between debit and credit DebitCredit 7. choose a basic type LiabilityStockholders’ EquityAsset choose a specific account Advertising ExpenseAccounts PayableDividendsService RevenueSuppliesAccounts ReceivableCashEquipment select between increase and decrease IncreaseDecrease select between debit and credit CreditDebit choose a basic type Stockholders’ EquityLiabilityAsset choose a specific account DividendsEquipment SuppliesCashService RevenueAccounts ReceivableAccounts PayableAdvertising Expense select between increase and decrease DecreaseIncrease select between debit and credit CreditDebit 8. choose a basic type LiabilityStockholders’ EquityAsset choose a specific account SuppliesCashEquipmentAccounts PayableAccounts ReceivableDividendsAdvertising ExpenseService Revenue select between increase and decrease IncreaseDecrease select between debit and credit DebitCredit

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Selected transactions for Front Room, an interior decorator corporation, in its first month of business, are as follows.

1.		Issued stock to investors for $16,600 in cash.
2.		Purchased used car for $10,700 cash for use in business.
3.		Purchased supplies on account for $200.
4.		Billed customers $4,860 for services performed.
5.		Paid $290 cash for advertising start of the business.
6.		Received $1,570 cash from customers billed in transaction (4).
7.		Paid creditor $410 cash on account.
8.		Paid dividends of $350 cash to stockholders

Expense, Service Revenue, etc.); whether the specific account is increased or decreased; and the normal balance of the specific account.

	Account Debited	Account Credited
No.	Basic Type	Specific Account	Effect	Normal Balance	Basic Type	Specific Account	Effect	Normal Balance
1.	Asset	Cash	Increase	Debit	Stockholders’ Equity	Common Stock	Increase	Credit

2.	choose a basic type Stockholders’ EquityLiabilityAsset	choose a specific account Accounts PayableService RevenueCashEquipmentSuppliesAccounts ReceivableAdvertising ExpenseDividends	select between increase and decrease IncreaseDecrease	select between debit and credit CreditDebit	choose a basic type AssetStockholders’ EquityLiability	choose a specific account Accounts ReceivableCashService RevenueSuppliesAdvertising ExpenseAccounts PayableDividendsEquipment	select between increase and decrease IncreaseDecrease	select between debit and credit DebitCredit

3.	choose a basic type Stockholders’ EquityAssetLiability	choose a specific account Accounts ReceivableAdvertising ExpenseAccounts PayableCashDividendsSuppliesService RevenueEquipment	select between increase and decrease IncreaseDecrease	select between debit and credit CreditDebit	choose a basic type AssetStockholders’ EquityLiability	choose a specific account DividendsAccounts PayableAdvertising ExpenseSuppliesEquipment CashService RevenueAccounts Receivable	select between increase and decrease IncreaseDecrease	select between debit and credit DebitCredit

4.	choose a basic type Stockholders’ EquityLiabilityAsset	choose a specific account DividendsAccounts ReceivableEquipmentAdvertising ExpenseSuppliesAccounts PayableService RevenueCash	select between increase and decrease DecreaseIncrease	select between debit and credit CreditDebit	choose a basic type LiabilityAssetStockholders’ Equity	choose a specific account Equipment Accounts PayableSuppliesDividendsCashService RevenueAdvertising ExpenseAccounts Receivable	select between increase and decrease IncreaseDecrease	select between debit and credit CreditDebit

5.	choose a basic type LiabilityAssetStockholders’ Equity	choose a specific account Accounts ReceivableAccounts PayableDividendsService RevenueAdvertising ExpenseSuppliesEquipmentCash	select between increase and decrease DecreaseIncrease	select between debit and credit DebitCredit	choose a basic type Stockholders’ EquityLiabilityAsset	choose a specific account Service RevenueDividendsEquipment Accounts PayableCashAccounts ReceivableAdvertising ExpenseSupplies	select between increase and decrease DecreaseIncrease	select between debit and credit DebitCredit

6.	choose a basic type Stockholders’ EquityLiabilityAsset	choose a specific account Accounts PayableService RevenueCashAdvertising ExpenseEquipmentSuppliesAccounts ReceivableDividends	select between increase and decrease DecreaseIncrease	select between debit and credit CreditDebit	choose a basic type Stockholders’ EquityLiabilityAsset	choose a specific account Advertising ExpenseEquipment Accounts ReceivableService RevenueDividendsAccounts PayableSuppliesCash	select between increase and decrease DecreaseIncrease	select between debit and credit DebitCredit

7.	choose a basic type LiabilityStockholders’ EquityAsset	choose a specific account Advertising ExpenseAccounts PayableDividendsService RevenueSuppliesAccounts ReceivableCashEquipment	select between increase and decrease IncreaseDecrease	select between debit and credit CreditDebit	choose a basic type Stockholders’ EquityLiabilityAsset	choose a specific account DividendsEquipment SuppliesCashService RevenueAccounts ReceivableAccounts PayableAdvertising Expense	select between increase and decrease DecreaseIncrease	select between debit and credit CreditDebit

8.	choose a basic type LiabilityStockholders’ EquityAsset	choose a specific account SuppliesCashEquipmentAccounts PayableAccounts ReceivableDividendsAdvertising ExpenseService Revenue	select between increase and decrease IncreaseDecrease	select between debit and credit DebitCredit

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