Is3350 Unit 1 Assignment

This is a partial listing of another sample chart of accounts. Note that each account is assigned a three-digit number followed by the account name. The first digit of the number signifies if it is an asset, liability, etc. For example, if the first digit is a "1" it is an asset, if the first digit is a "3" it is a revenue account, etc. The company decided to include a column to indicate whether a debit or credit will increase the amount in the account. This sample chart of accounts also includes a column containing a description of each account in order to assist in the selection of the most appropriate account.

Asset Accounts
No.
Account Title
To
Increase
Description/Explanation of Account
101
Cash
Debit
Checking account balance
Supplies that have been used are recorded in Supplies Expense.
160
Prepaid Insurance
Debit
Cost of insurance that is paid in advance and includes a future accounting period.
170
Land
Debit
Cost to acquire and prepare land for use by the company.
175
Buildings
Debit
Cost to purchase or construct buildings for use by the company.
178
Accumulated
Depreciation - Buildings
Credit
Amount of the buildings' cost that has been allocated to Depreciation Expense since the time the building was acquired.
180
Equipment
Debit
Cost to acquire and prepare equipment for use by the company.
188
Accumulated
Depreciation - Equipment
Credit
Amount of equipment's cost that has been allocated to Depreciation Expense since the time the equipment was acquired.

Liability Accounts
No.
Account Title
To
Increase
Description/Explanation of Account
210
Notes Payable
Credit
The amount of principal due on a formal written promise to pay. Loans from banks are included in this account.
215
Accounts Payable
Credit
Amount owed to suppliers who provided goods and services to the company but did not require immediate payment in cash.
220
Wages
When the goods are delivered or services are provided, this liability amount decreases.
250
Mortgage Loan Payable
Credit
A formal loan that involves a lien on real estate until the loan is repaid.

Owner's Equity Accounts
No.
Account Title
To
Increase
Description/Explanation of Account
290
Mary Smith, Capital
Credit
Amount the owner invested in the company (through cash or other assets) plus earnings of the company not withdrawn by the owner.
295
Mary Smith, Drawing
Debit
Amount that the owner of the sole proprietorship has withdrawn for personal use during the current accounting year. At the end of the year, the amount in this account will be transferred into Mary Smith, Capital (account 290).

Operating Revenue Accounts
No.
Account Title
To
Increase
Description/Explanation of Account
310
Service Revenues
Credit
Amounts earned from providing services to clients, either for cash or on credit. When a service is provided on credit, both this account and Accounts Receivable will increase. When a service is provided for immediate cash, both this account and Cash will increase.

Operating Expense Accounts
No.
Account Title