Concept explainers
Exercise 4.9
LO 2, 6, 7
Record transactions and adjustments Prepare an answer sheet with the column headings shown after the following list of transactions. Record the effect, if any, of the transaction
(Note: As an alternative to using the columns, you may write the
- During the month, the Supplies (asset) account was debited $3,600 for supplies purchased. The cost of supplies used during the month was $2,800. Record the adjustment to properly reflect the amount of supplies used and supplies still on hand at the end of the month.
- An insurance premium of $960 was paid for the coming year. Prepaid Insurance was debited.
- Wages of $6,400 were paid for the current month.
- Interest income of $500 was received for the current month.
- Accrued $1,400 of commissions payable to sales staff for the current month.
- Accrued $260 of interest expense at the end of the month.
- Received $4,200 on
accounts receivable accrued at the end of the prior month. - Purchased $1,200 of merchandise inventory from a supplier on account.
- Paid $320 of interest expense for the month.
- Accrued $ 1,600 of wages at the end of the current month.
- Paid $1,000 of accounts payable.
Transaction/Adjustment | Assets Liabilities | Stockholders’Equity | NetIncome |
a. | Supplies |
-2,800
-2,800
(Note: An increase to Supplies Expense decreases Net Income.)
Want to see the full answer?
Check out a sample textbook solutionChapter 4 Solutions
Accounting: What the Numbers Mean
- What is the impact on the accounting equation when an accounts receivable is collected? A. both sides increase B. both sides decrease C. only the Asset side changes D. the total of neither side changesarrow_forwardIndicate what impact the following adjustments have on the accounting equation: (assume normal balances). Table 4.7arrow_forwardIdentify whether each of the following transactions would be recorded with a debit (Dr) or credit (Cr) entry. Table 3.7arrow_forward
- Identify the financial statement on which each of the following account categories would appear: the balance sheet (BS), the income statement (IS), or the retained earnings statement (RE). Indicate the normal balance (Dr for debit; Cr for credit) for each account category. Table 3.16arrow_forwardUsing the worksheet to prepare financial statements Answer the following questions: Requirements What type of normal balance does the Retained Earnings account have—debit or credit? Which type of income statement account has the same type of balance as the Retained Earnings account? Which type of income statement account has the opposite type of balance as the Retained Earnings account? What do we call the difference between total debits and total credits on the income statement section of the worksheet?arrow_forwardQuestion 7 What is the impact on the accounting equation when an accounts receivable is collected? O both sides increase O both sides decrease O only the Asset side changes O the total of neither side changesarrow_forward
- Identifying increases and decreases in accounts and normal balances Insert the missing information into the accounting equation. Signify increases as Incr. and decreases as Decr.arrow_forward4.1 Identify whether each of the following transactions, which are related to revenue recognition, areaccrual, deferral, or neither.A. earn now, collect nowB. earn now, collect laterC. earn later, collect nowarrow_forwardQUESTION 49 Match the statements below with the accounting assumption, characteristic, or principle to which the statement relates. Assumptions/characteristics/principles may be used once, more than once, or not at all. V Recorded when the performance obligation is satisfied. a. Revenue recognition principle V The reason for recording accruals and deferrals in adjusting entries. b. Matching principle Valuing assets at amounts originally paid for them. C. Historical cost principle d. Entity assumed to have a long life Going concern assumption Description of significant accounting policies and unusual events. e. Full disclosure principle f. Information has predictive and confirmatory value. Relevance characteristic 8. Consistency characteristicarrow_forward
- Which of the following accounts normally has a debitbalance?a. Unearned Revenueb. Rent Expensec. Retained Earningsd. Sales Revenuearrow_forwardIdentify the correct pair of formula from the following column I and II: (Choose the correct alternative) Column I Column II A Current Account Surplus i. Receipts Payments C Balance Current Account i. Receipts + Payments D Current Account Deficit iv. Receipts < Payments Alternatives: а) А -i b) В - ii c) C - ii d) D - ivarrow_forwardRequired: Complete the table using additions and subtractions to show the dollar effects of transactions on individual items of the accounting equation. Show new balances after each transaction.arrow_forward
- Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax CollegeCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,