Versa below is the t account for cash for the

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Comprehensive T-Accounting Illustration C ASH The following diagram illustrating the flow of transactions from a general journal to a set of t-accounts may look rather “busy” but it is actually quite simple. The debits/credits for each entry can be traced to the corresponding accounts. Once all of entries are transferred, the resulting balances for each account can be carried forward to form the trial balance. GENERAL JOURNAL Date 1-1-X3 Accounts Cash Credits 15,000 8,000 25,000 15,000 3,200 25,000 Issued stock to shareholders, in exchange for cash Advertising Expense ACCOUNTS PAYABLE 2,000 Cash 2,000 500 Cash Accounts Utilities Expense Debits Credits 1,000 ADVERTISING EXPENSE 8,000 Service Revenue 8,000 Accounts Payable Cash XAO CORPORATION Trial Balance January 31, 20X3 4,800 Accounts Receivable 4,800 Received 60% of the amount due on the receivable that was established on January 17 1-28-X3 Land 15,000 Cash Notes Payable Purchased land by giving $5,000 cash, and promising to pay the remainder in 90 days 1,000 500 Paid half of the amount due on the utility bill received on January 15 1-25-X3 1,000 2,000 500 Cash UTILITIES EXPENSE 2,000 Provided services to customers on account 1-18-X3 4,000 8,000 12,000 12,000 25,000 1,000 Accounts Payable Accounts Receivable SERVICE REVENUE 25,000 Page 2 Received bill for utility costs incurred 1-17-X3 10,000 CAPITAL STOCK GENERAL JOURNAL Date 10,000 4,000 Provided services to customers for cash 1-15-X3 NOTES PAYABLE 1,000 4,000 Service Revenue 4,800 500 Paid advertising expense for initial advertising programs 1-8-X3 2,000 500 5,000 7,500 ACCOUNTS RECEIVABLE LAND Page 1 Debits Capital Stock 1-4-X3 25,000 4,000 4,800 33,800 26,300 5,000 10,000 Debits Cash A ccounts receivable L and A ccounts payable N otes payable Capital stock Service revenues A dvertising expense U tilities expense $26,300 3,200 15,000 2,000 1,000 $47,500 Credits $ 500 10,000 25,000 12,000 $47,500 Download free eBooks at 46 Basics of Accounting & Information Processing T-accounts 11.2 Chart of Account A listing of all accounts in use by a particular company is called the chart of accounts. Individual accounts are often given a specific reference number. The numbering scheme helps keep up with the accounts in use, and helps in the classification of accounts. For example, all assets may begin with ‘‘1’’ (e.g., 101 for Cash, 102 for Accounts Receivable, etc.), liabilities with “2,” and so forth. A simple chart of accounts for Xao Corporation might appear as follows: No. 101: Cash No. 102: Accounts Receivable No. 103: Land No. 201: Accounts Payable No. 202: Notes Payable No. 301: Capital Stock No. 401: Service Revenue No. 501: Advertising Expense No. 502: Utilities Expense Please click the advert The assignment of a numerical account number to each account assists in data management, in much the same way as zip codes help move mail more efficiently. Many computerized systems allow rapid entry of accounts by reference...
View Full Document

This document was uploaded on 09/24/2013.

Ask a homework question - tutors are online