Financial Act Demonstration Problem #2

Rules increases to assets are debited increases to

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Unformatted text preview: o assets are debited, increases to liabilities are credited. Journal entry: Debit to Cash, Credit to Unearned revenues (a liability account) Feb 3 Cash Unearned revenues 8. Dr. 300 Cr. 300 Post to the general ledger: Cash BB 7,800 2/1 750 2/1 2,500 2/3 300 Unearned Revenues 2/3 300 February 7: Paid administrative assistant for first week of work, $250. 5. 6. 7. Transaction: Paying wages to employee. Expenses have been incurred in February and paid in February. Rules: Increases to expense accounts are debited, and decreases to asset accounts are credited. Journal entry: Debit to Wages Expense (Income statement) and Credit to Cash (balance sheet). Jan 4 Wages Expense Cash 8. Dr. 250 Cr. 250 Post to the general ledger: Cash BB 7,800 2/1 750 2/1 2,500 2/7 250 2/3 300 Wages Expense 2/7 250 February 9: Prepared financial statement compilation for a client, $1,000. The compilation along with the invoice was mailed to the client today. 5. 6. 7. Transaction: Performed a service that has been earned. Did not receive cash yet. Rules:...
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