ASSIGNMENT 5 - ASSIGNMENT 5 9.26.2011(Unit 3 Recording Transaction in T-account PAGE 50-51 Check your reading 1 a)Account is a form in which changes

ASSIGNMENT 5 - ASSIGNMENT 5 9.26.2011(Unit 3 Recording...

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ASSIGNMENT 5 9.26.2011 (Unit 3 Recording Transaction in T-account) PAGE 50-51 Check your reading 1. a)Account is a form in which changes caused by transactions are recorded. b)Debit refers to the left side of account , and is used to recorded the increase of the money. c)Credit means the decrease in cash d)Ledger is a group of accounts 2. On the left side or debit side is the Assets. Because the Assets are recorded on the left side on balance sheet . 3. Since the Liabilities are located on the right side on the balance sheet , so the Liabilities should be recorded on the right side of the Account. 4. Since the owner’s equity is located on the right side of the balance sheet , so the owner’s equity should be put on the right side on the Account. 5. a)”cash ” should be put on the left side b)”supplies” should be put on the left side c)”Mortgage Payable ” should be put on the right side d)”Accounts payable ” should be put on the right side e)”Computer Equipment ” should be put on the left side f)”Bank Loan ” should be put on the right side g)”Land ” should be put on the left side h)”Building ” should be put on the left side I)”Delivery Truck ” should be put on the left side j)”Owner’s Capital” should be put on the right side 6. Assets Account Liabilities Account Increase decrease decrease increase Owner’s equity Account Decrease increase 7. “Double-entry accounting principle ” requires a debit amount equal to the credit amount for each transaction. 8. The number of accounts in ledger depends on the total items’ number of Assets , Liabilities and Owner's equity. 9. To determine the new balance: a) add up the debit side of the account
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b) add up the credit side of the account c) subtract the smaller from the larger and place the answer on the larger side of the 10. a) a trial balance is a list of the ledger account balance. b) it indicates the mathematical accuracy of the ledger PAGE 51-58 Apply your knowledge Exercise part A 1. a)&b) CASH ACCOUNTS PAYABLE May 31 5000 May 31 16 000 Balance 5000 Balance 16 000 SUPPLIES MORTGAGE PAYABLE May 31 10 000 May 31 84 000 Balance 10 000 Balance 84 000 LAND X.Diaz ,Capital May 31 40 000 May 31 205 000 Balance 40 000 Balance 205 000 BUILDING May 31 200 000 Balance 200 000 EQUIPMENT May 31 50 000 Balance 50 000 ------Ledger for Dominicana Restaurant in May 31,20-
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2. CASH ACCOUNTS PAYABLE Jan 31 6000 Jan 31 5000 Balance 6000 Balance 5000 ACOUNTS RECEIVABLE BANK LOAN Jan 31 19 000 Jan 31 13 000 Balance 19 000 Balance 13 000 SUPPLIES R.Smith ,Capital Jan 31 6 000 Jan 31 48 000 Balance 6 000 Balance 48 000 EQUIPMENT Jan 31 35 000 Balance 35 000 ------Ledger for Dr. R.Smith in January 31 20- 3 . a) Increase/ Debit/ Transaction Account Affected Type of Account Decrease Credit Amount Jun.1 Equipment Asset Increase Debit $780 Accounts Payable Liability Increase Credit 780 Jun.2 Mortgage Payable Liability Decrease Debit 880 Cash Asset Decrease Credit 880 Jun.3 Account Payable Liability Decrease Debit 1300 Cash Asset Decrease Credit 1300 Jun.5 Furniture Assets Increase Debit 600 Cash Asset Decrease Credit 280 Account Payable Liability Increase Credit 320 Jun.6 Cash Asset Increase Debit 3000 X.Diaz, Capital Owner’s Equity Increase Credit 3000
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