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Chapter 2: 2TI (page 64)

For each account, identify if the change would be recorded as a debit (DR) or credit (CR).

11. Increase to Cash 16. Increase to Interest Revenue

12. Decrease to Accounts Payable 17. Increase to Rent Expense

13. Increase to Common Stock 18. Decrease to Office Supplies

14. Increase to Unearned Revenue 19. Increase to Prepaid Rent

15. Decrease to Accounts Receivable 20. Increase to Notes Payable

Short Answer

Expert verified

Answer

Common stock represents the ownership of the company and transactions are identified as debit or credit.

Step by step solution

01

Definition of Common Stock

The common stock is defined as the stocks or shares which represent the ownership of the company with voting rights.

02

Identification of recording the change

Transaction

Debit (dr) or Credit (cr)

11 Increase to Cash

Debit (dr)

12 Decrease to Accounts Payable

Debit (dr)

13 Increase to Common Stock

Credit (cr)

14 Increase to Unearned Revenue

Credit (cr)

15 Decrease to Accounts Receivable

Credit (cr)

16 Increase to Interest Revenue

Credit (cr)

17 Increase to Rent Expense

Debit (dr)

18 Decrease to Office Supplies

Credit (cr)

19 Increase to Prepaid Rent

Debit (dr)

20 Increase to Notes Payable

Credit (cr)

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Most popular questions from this chapter

Using the following accounts and their balances, prepare the trial balance for Cooper Furniture Repair as of December 31, 2018. All accounts have normal balances.

Cash \( 7,000 Advertising Expense \) 1,200

Unearned Revenue 4,500 Utilities Expense 800

Equipment 10,000 Rent Expense 5,000

Service Revenue 8,000 Accounts Payable 2,300

Common Stock 12,200 Dividends 3,000

Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance

The trial balance of Shawn Merry, CPA, is dated March 31, 2018: During April, the business completed the following transactions:

Cash 17,000

Office Supplies 1,200

Accounts Receivable 10,500

Land 29,000

Furniture 0

Automobile 0

Accounts Payable 3,800

Unearned Revenue 0

Common Stock 46,200

Dividends 0

Rent Expense 1,000

Salaries Expense 2,500

Service Revenue 11,200

Total Balance \( 61,200 61,200

During April, the business completed the following transactions:

Apr. 4 Collected \)6,000 cash from a client on account.

8 Performed tax services for a client on account, \(5,500.

13 Paid \)3,300 on account.

14 Purchased furniture on account, \(4,000.

15 Menning contributed his personal automobile to the business in exchange for common stock. The automobile had a market value of \)11,500.

18 Purchased office supplies on account, \(1,600.

19 Received \)2,750 for tax services performed on April 8.

20 Paid cash dividends of \(7,500.

21 Received \)4,900 cash for consulting work completed.

24 Received \(2,500 cash for accounting services to be completed next month.

27 Paid office rent, \)900.

28 Paid employee salary, $1,200.

Requirements 2. Open the four-column ledger accounts listed in the trial balance, together with their balances as of March 31. Use the following account numbers: Cash, 11; Accounts Receivable, 12; Office Supplies, 13; Land, 14; Furniture, 15; Automobile, 16; Accounts Payable, 21; Unearned Revenue, 22; Common Stock, 31; Dividends, 33; Service Revenue, 41; Salaries Expense, 51; and Rent Expense, 52.

Question:Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance The following transactions occurred during the month for Teresa Parker, CPA:

Jun. 1 Parker opened an accounting firm by contributing \(13,200 cash and office furniture with a fair market value of \)5,300 in exchange for common stock.

5 Paid monthly rent of \(1,300.

9 Purchased office supplies on account, \)600.

14 Paid employee’s salary, \(1,900.

18 Received a bill for utilities to be paid next month, \)370.

21 Paid \(500 of the accounts payable created on June 9.

25 Performed accounting services on account, \)5,700.

28 Paid cash dividends of $6,700

Requirements 1. Open the following four-column accounts of Teresa Parker, CPA: Cash, 110; Accounts Receivable, 120; Office Supplies, 130; Office Furniture, 140; Accounts Payable, 210; Utilities Payable, 220; Common Stock, 310; Dividends, 320; Service Revenue, 410; Salaries Expense, 510; Rent Expense, 520; and Utilities Expense, 530.

Question: Correcting errors in a trial balance

The following trial balance of Joy McDowell Tutoring Service as of May 31, 2018, does not balance.

Account Title Office Supplies Cash Debit Credit Accounts Receivable Computer Equipment Accounts Payable Utilities Payable Common Stock Dividends Service Revenue Salaries Expense Utilities Expense Rent Expense Total Balance \( 33,100 11,600 \) 11,100 9,600 800 \( 2,800 \) 35,000 1,900 800 700 2,000 600 15,800 10,400

Investigation of the accounting records reveals that the bookkeeper:

a. Recorded a \(400 cash revenue transaction by debiting Accounts Receivable. The credit entry was correct.

b. Posted a \)2,000 credit to Accounts Payable as \(200.

c. Did not record Utilities Expense or the related Utilities Payable in the amount of \)300.

d. Understated Common Stock by $100.

Prepare the corrected trial balance as of May 31, 2018, complete with a heading; journal entries are not required.

Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance

The trial balance of Shawn Merry, CPA, is dated March 31, 2018: During April, the business completed the following transactions:

Cash 17,000

Office Supplies 1,200

Accounts Receivable 10,500

Land 29,000

Furniture 0

Automobile 0

Accounts Payable 3,800

Unearned Revenue 0

Common Stock 46,200

Dividends 0

Rent Expense 1,000

Salaries Expense 2,500

Service Revenue 11,200

Total Balance \( 61,200 61,200

During April, the business completed the following transactions:

Apr. 4 Collected \)6,000 cash from a client on account.

8 Performed tax services for a client on account, \(5,500.

13 Paid \)3,300 on account.

14 Purchased furniture on account, \(4,000.

15 Menning contributed his personal automobile to the business in exchange for common stock. The automobile had a market value of \)11,500.

18 Purchased office supplies on account, \(1,600.

19 Received \)2,750 for tax services performed on April 8.

20 Paid cash dividends of \(7,500.

21 Received \)4,900 cash for consulting work completed.

24 Received \(2,500 cash for accounting services to be completed next month.

27 Paid office rent, \)900.

28 Paid employee salary, $1,200.

Requirements 2. Open the four-column ledger accounts listed in the trial balance, together with their balances as of March 31. Use the following account numbers: Cash, 11; Accounts Receivable, 12; Office Supplies, 13; Land, 14; Furniture, 15; Automobile, 16; Accounts Payable, 21; Unearned Revenue, 22; Common Stock, 31; Dividends, 33; Service Revenue, 41; Salaries Expense, 51; and Rent Expense, 52.
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