{[ promptMessage ]}

Bookmark it

{[ promptMessage ]}

Financial Act Demonstration Problem #2

Financial Act Demonstration Problem #2 - Demonstration...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Demonstration Problem #2 (Income Statement Accounts Included) Cainas Company, CPAs February 20XX Jennifer Cainas, C.P.A. decided to open her own CPA firm in January (Demonstration Problem #1). The January transactions have all been recorded in Cainas Company's general ledger. The following transactions take place during the month of February: February 1: Cainas Company prepared personal tax returns for 10 clients at $250 each, and each client paid the amount due when they picked up their tax return after 5:00 p.m. 5. Transaction: Cainas Company has provided a service (preparing tax returns) and has been paid in cash. Revenues are realizable and have been earned. 6. Rules: Cash is an asset account, increases in assets are debited. Revenues are always credits. 7. Journal entry: Debit to Cash (balance sheet account), Credit to Service revenues (income statement account!) Dr. Cr. Feb 1 Cash 2,500 Service Revenues 2,500 8. Post to the general ledger: Cash Service Revenues BB 7,800 2/1 2,500 2/1 2,500 February 1: Paid remaining balance of office equipment, $750.
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full Document Right Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}