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FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Question
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
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Account Credited
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---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
No.
|
Basic Type
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Specific Account
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Effect
|
Normal Balance
|
Basic Type
|
Specific Account
|
Effect
|
Normal Balance
|
||||||||
1.
|
Asset | Cash | Increase | Debit | 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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