Credit Debit Analysis

Topics: Accounts receivable, Double-entry bookkeeping system, Generally Accepted Accounting Principles Pages: 14 (3585 words) Published: November 13, 2011
T.J. Carlin has the following transactions during August of the current year. Indicate (a) the effect on the accounting equation and (b) the debit-credit analysis. Aug. 1 |   | Opens an office as a financial advisor, investing $8,000 in cash. | 4 |   | Pays insurance in advance for 6 months, $1,800 cash. | 16 |   | Receives $800 from clients for service provided. | 27 |   | Pays secretary $1,000 salary. |   |   | (a) Effect on Accounting Equation | (b) Debit-Credit Analysis | Aug. 1 |   | The Asset account Cash is increased. | Debits increase Assets : |   |   |   | Debit Cash  |   |   |   |   |   |   | The Owner's Equity account T.J. Carlin, Capital is increased. | Credits increase Owner's Equity ; |   |   | | Credit T.J. Carlin, Capital  |   |   |   |   | 4 |   | The Asset account Prepaid Insurance is increased. | Debits increase Assets : |   |   |   | Debit Prepaid Insurance  |   |   |   |   |   |   | The Asset account Cash is decreased. | Credits decrease Assets: |   |   |   | Credit Cash  |   |   |   |   | 16 |   | The Asset account Cash is increased. | Debits increase Assets: |   |   |   | Debit Cash  |   |   |   |   |   |   | The Revenue account Service Revenue is increased. | Credits increase Revenues: |   |   |   | Credit Service Revenue  |   |   |   |   | 27 |   | The Expense account Salaries Expense is increased. | Debits increase Expenses: |   |   |   | Debit Salaries Expense   |   |   |   |   |   |   | The Asset account Cash is decreased | Credits decrease Assets: |   |   |   | Credit Cash  | | |

Presented below is information related to Hanshew Real Estate Agency. Oct. 1   Pete Hanshew begins business as a real estate agent with a cash investment of $15,000. 2   Hires an administrative assistant. 3   Purchases office furniture for $1,900, on account. 6   Sells a house and lot for B. Kidman; bills B. Kidman $3,200 for realty services provided. 27   Pays $700 on the balance related to the transaction of October 3. 30   Pays the administrative assistant $2,500 in salary for October. Instructions Complete the debit-credit analysis for each transaction. (If no transaction is required, select NA.)       (a) Effect on Accounting Equation   (b) Debit-Credit Analysis Oct. 1   The Asset account Cash is increased.   Debits increase Assets :         Debit Cash                The Owner's Equity account Pete Hanshew, Capital is increased.   Credits increase Owner's Equity ;         Credit Pete Hanshew, Capital            2   The NA account NA is NA.   Debits NA NA :         Debit NA                The NA account NA is NA.   Credits NA NA:         Credit NA            3   The Asset account Office Furniture is increased.   Debits increase Assets:         Debit Office Furniture                The Liability account Accounts Payable is increased.   Credits increase Liabilities:         Credit Accounts Payable            6   The Asset account Accounts Receivable is increased.   Debits increase Assets:         Debit Accounts Receivable                 The Revenue account Service Revenue is increased   Credits increase Revenues:       Credit Service Revenue            27   The Liability account Accounts Payable is decreased.   Debits decrease Liabilities:         Debit Accounts Payable                 The Asset account Cash is decreased.   Credits decrease Assets:         Credit Cash            30   The Expense account Salaries Expense is increased.   Debits increase Expenses:         Debit Salaries Expense                ...
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