Financial class 04

Financial class 04 - Chapter 2: T Accounts, Debits, and...

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Chapter 2: T Accounts, Debits, and Credits (continued) Borrowing resources : On September 6 the company buys $550 of supplies, agreeing to pay for the supplies later in September or October. Show how this event affects the company's resources and sources of resources. Total Resources = Sources of Borrowed Resources + Sources of Owner Invested Resources + Sources of Management Generated Resources Assets = Liabilities + Stockholders' Equity $9,250 = $450 + $7,000 + $1,800 Total Resources = Sources of Borrowed Resources + Sources of Owner Invested Resources + Sources of Management Generated Resources Assets = Liabilities + Stockholders' Equity $9,250 = $450 + $7,000 + $1,800
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+ $550 supplies = + $550 accounts payable $9,800 = $1,000 + $7,000 + $1,800 Show how the September 6 purchase of supplies affects the company's T accounts. Cash Accounts Receivable Supplies 9/1 $8,250 9/1 $600 9/2 $600 9/1 $400 9/2 $600 $8,850 $0 Accounts Payable Common Stock Retained Earnings 9/1 $450 9/1 $7,000 9/1 $1,800 $7,000 $1,800
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Cash Accounts Receivable Supplies 9/1 $8,250 9/1 $600 9/2 $600 9/1 $400 9/2 $600 9/6 $550 $8,850 $0 $950 Accounts Payable Common Stock Retained Earnings 9/1 $450 9/1 $7,000 9/1 $1,800 9/6 $550 $1,000 $7,000 $1,800 Identify the one new debit and credit rule developed in the above analysis. Assets increase with debits. Assets decrease with credits.
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Liabilities increase with credits. Generating resources through management operations : On September 12 the manager coaches one client and receives $800 cash. Show how this event affects the company's resources and sources of resources. Total Resources = Sources of Borrowed Resources + Sources of Owner Invested Resources + Sources of Management Generated Resources Assets = Liabilities + Stockholders' Equity $9,800 = $1,000 + $7,000 + $1,800
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Total Resources = Sources of Borrowed Resources + Sources of Owner Invested Resources + Sources of
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Financial class 04 - Chapter 2: T Accounts, Debits, and...

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