Explanation Journalizing: Journalizing refers to the process in which transactions of an organization are recorded in a sequence. Based on the recorded entries, the accounts are posted to the relevant ledger accounts. Accounting rules for journal entries: The balance of an account is increased when assets, expenses, and losses are debited and liabilities, capital, revenue, and gains are credited. The balance of an account is decreased when assets, expenses, and losses are credited and liabilities, capital, revenue, and gains are credited. Record sale transaction: General Journal Page 11 Date Account Title and Explanation Post Ref. Debit ($) Credit ($) April 1, 2019 Accounts receivable / AMC 4,500 Sales 4,500 (To record sales, invoice-3912) Table (1) Accounts receivable is an asset account and its value is increased by $4,500. Therefore, debit the accounts receivable/ AMC with $4,500. Sales is an income and its value is increased by $4,500. Therefore, credit the sales account with $4,500. Record receipt of cash from accounts receivable: General Journal Page 11 Date Account Title and Explanation Post Ref. Debit ($) Credit ($) April 3, 2019 Cash 1,980 Sales discount 20 Accounts receivable/MSS 2,000 (To record receipt from accounts receivable) Table (2) The cash account is an asset account and the value of cash is increased by $1,980. Therefore, debit the cash account with $1,980. Sales discount is an expense and the value of expense is increased by $20. Therefore, debit the sales discount with $20 Accounts receivable is an asset and its value is decreased by $2,000. Therefore, credit the accounts receivable/MSS with $2,000. Record cash sales: General Journal Page 11 Date Account Title and Explanation Post Ref. Debit ($) Credit ($) April 5, 2019 Cash 1,725 Sales 1,725 (To record cash sales) Table (3) The cash account is an asset account and the value of cash is increased by $1,725. Therefore, debit the cash account with $1,725. Sales is an income and its value is increased by $1,725. Therefore, credit the sales account with $1,725. Record sales return: General Journal Page 11 Date Account Title and Explanation Post Ref. Debit ($) Credit ($) April 7, 2019 Sales return and allowances 80 Cash 80 (To record sales return) Table (4) Sales return and allowance is a contra income and its value is decreased by $80. Therefore, debit the sales return and allowance account with $80. The cash account is an asset account and the value of cash is decreased by $80. Therefore, credit the cash account with $80. Record sale transaction: General Journal Page 11 Date Account Title and Explanation Post Ref. Debit ($) Credit ($) April 8, 2019 Accounts receivable/ MW 6,500 Sales 6,500 (To record sales, invoice-3913) Table (5) Accounts receivable is an asset account and its value is increased by $6,500. Therefore, debit the accounts receivable/ MW with $6,500. Sales is an income and its value is increased by $6,500. Therefore, credit the sales account with $6,500. Record receipt of cash from accounts receivable: General Journal Page 11 Date Account Title and Explanation Post Ref. Debit ($) Credit ($) April 10, 2019 Cash 4,455 Sales discount 45 Accounts receivable/AMC 4,500 (To record receipt from the accounts receivable) Table (6) The cash account is an asset account and the value of cash is increased by $4,455. Therefore, debit the cash account with $4,455. Sales discount is an expense and the value of expense is increased by $45. Therefore, debit the sales discount with $45. Accounts receivable is an asset and its value is decreased by $4,500. Therefore, credit the accounts receivable/AMC with $4,500. Record sales return: General Journal Page 11 Date Account Title and Explanation Post Ref. Debit ($) Credit ($) April 15, 2019 Sales return and allowances 2,300 Accounts receivable/MW 2,300 (To record sales return) Table (7) Sales return and allowance is a contra income and its value is decreased by $2,300. Therefore, debit the sales return and allowance account with $2,300. Accounts receivable is an asset and its value is decreased by $2,300. Therefore, credit the accounts receivable/MW with $2,300. Record receipt of cash from accounts receivable: General Journal Page 11 Date Account Title and Explanation Post Ref. Debit ($) Credit ($) April 17, 2019 Cash 4,116 Sales discount 84 Accounts receivable/MW 4,200 (To record receipt from the accounts receivable) Table (8) The cash account is an asset account and the value of cash is increased by $4,116. Therefore, debit the cash account with $4,116. Sales discount is an expense and the value of expense is increased by $84. Therefore, debit the sales discount account with $84. Accounts receivable is an asset and its value is decreased by $4,200. Therefore, credit the accounts receivable/MW with $4,200. Record receipt of cash from accounts receivable: General Journal Page 11 Date Account Title and Explanation Post Ref. Debit ($) Credit ($) April 19, 2019 Cash 2,300 Accounts receivable/OLS 2,300 (To record receipt from the accounts receivable) Table (9) The cash account is an asset account and the value of cash is increased by $2,300. Therefore, debit the cash account with $2,300. Accounts receivable is an asset and its value is decreased by $2,300. Therefore, credit the accounts receivable/OLS with $2,300. Record sale transaction: General Journal Page 11 Date Account Title and Explanation Post Ref...

4th Edition

ISBN: 9781260255157

Author: Haddock

Publisher: MCG CUSTOM

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Chapter 7 Solutions

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Solution Summary: The author explains journalizing as the process in which transactions of an organization are recorded in a sequence.

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