Online Accounting Course Simple Studies

Accounting Solution 4.1 (Double-entry Accounting System)

The tables show the answers:

Date

Explanations of transactions

Jan. 5

 Cash and Contributed Capital increase. The owner(s) contributed cash in the business. Asset source transaction.

May 11

Cash and Notes Payable increase. The business borrowed money (probably from a bank). Asset source transaction.

May 27

 Land increases, Cash decreases and Notes Payable increase. The company invested in land and paid a portion of the price with cash. The other portion was agreed to be paid later, that is why Notes Payable increase. Combination of asset exchange and asset source transaction.

April 13

 Accounts Receivable and Consulting Revenue increase. Services were provided on account. Asset source transaction.

June 4

 Cash and Notes Payable decrease. The company paid off notes payable. Asset use transaction.

July 16

 Operating Expense increases and Cash decreases. Cash was paid for an operating expense. Asset use transaction.

Aug. 5

 Cash increases and Accounts Receivable decrease. The company collected cash from customers against accounts receivable. Asset exchange transaction.

Aug. 12

 Cash decreases and Distribution increases. Cash was distributed to the owner(s). Asset use transaction.

Aug. 26

 Cash decreases and Notes Receivable increase. The company loaned cash to another entity. Asset exchange transaction.

Sept. 15

 Car increases and Cash decreases. The company invested cash in a car (acquired a car). Asset exchange transaction.

Nov. 2

 Cash and Unearned Revenue increase. The business received cash in advance for services to be performed in the future. Asset source transaction.

Nov. 29

 Cash and Interest Payable decrease. The company paid off interest payable. Asset use transaction.

Dec. 31

 Rent Expense increases and Prepaid Rent decreases. The company adjusted the records to recognize rent expense for an accounting period. Asset use transaction.

Dec. 31

 Consulting Revenue increases and Unearned Revenue decreases. The records were adjusted to recognize revenue earned during the accounting period. Claims exchange transaction.

Dec. 31

 Depreciation Expense and Accumulated Depreciation increase. Depreciation expense was recorded at the accounting period end. Asset use transaction.

Dec. 31

 Supplies Expense increases and Supplies decreases. The business recorded supplies expense for the supplies used during the accounting period. Asset use transaction.

Date

Assets

=

Liab.

+

Equity

Rev.

-

Exp.

=

Net Inc.

Cash Flow

Jan. 5

+

 

n/a

 

+

n/a

  

n/a

 

n/a

+

FA

May 11

+

 

+

 

n/a

n/a

 

n/a

 

n/a

+

FA

May 27

±

 

+

 

n/a

n/a

 

n/a

 

n/a

-

IA

April 13

+

 

n/a

 

+

+

 

n/a

 

+

n/a

n/a

June 4

-

 

-

 

n/a

n/a

 

n/a

 

n/a

-

IA

July 16

-

 

n/a

  

-

n/a

 

+

 

-

-

OA

Aug. 5

±

 

n/a

 

n/a

n/a

 

n/a

 

n/a

+

OA

Aug. 12

-

 

n/a

 

-

n/a

 

n/a

 

n/a

-

FA

Aug. 26

±

 

n/a

 

n/a

n/a

 

n/a

 

n/a

-

OA

Sept. 15

±

 

n/a

 

n/a

n/a

 

n/a

 

n/a

-

IA

Nov. 2

+

 

+

 

n/a

n/a

 

n/a

 

n/a

+

OA

Nov. 29

-

 

-

 

n/a

n/a

 

n/a

 

n/a

-

OA

Dec. 31

-

 

n/a

 

-

n/a

 

+

 

-

n/a

n/a

Dec. 31

n/a

 

-

 

+

+

 

n/a

 

+

n/a

n/a

Dec. 31

-

 

n/a

 

-

n/a

 

+

 

-

n/a

n/a

Dec. 31

-

 

n/a

 

-

n/a

 

+

 

-

n/a

n/a