Unit 1 DB - paying $50,000 cash and equipment is purchased...

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Debits and credits in accounting are how we increase and decrease an account. Accounts are logged differently based on the type of account. Asset, expense, and dividend accounts carry a normal debit balance where liability, equity, and revenue accounts carry a normal credit balance. The diagram below shows how these accounts would be logged on the T-account. A company’s income statement will be used to log their revenue and expenses and a balance sheet is used to track their assets, liabilities, and equity Asset Account Liability Account Equity Account Revenue Account Balance Balance Balance Balance Expense Account Dividend Account Balance Balance Manufacturing company XYZ purchases inventory for $50,000 to use for production. They also purchased equipment to use totaling $17,000. When inventory is purchased by
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Unformatted text preview: paying $50,000 cash and equipment is purchased by paying $17,000 cash on August 15 th , 2010 the following journal entry is to be recorded. Being that inventory and equipment are considered assets, these transactions would affect the balance sheet. Date Debit Credit 15-August $50,000 15-August $17,000 15-August $67,000 Manufacturing company XYZ pays wages amounting to $ 25,000 per month to its workers, the following journal entry is to be recorded for the payment of wages for the month of May which is paid on 1st June:. Being that salary is an expense, this would affect the company’s income statement. Date Debit Credit 1-June $25,000 1-June $25,000...
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This note was uploaded on 04/02/2011 for the course ACCT 205 taught by Professor Wendyw.achilles during the Fall '10 term at American InterContinental University.

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Unit 1 DB - paying $50,000 cash and equipment is purchased...

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