Financial Act Demonsration Problem #1

1 2 3 transaction buying supplies that will have

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Unformatted text preview: that will have future economic benefit, on credit. Supplies is an asset, buying on credit is incurring a liability. Rules: Increases to assets are debited, increases to liabilities are credited. Journal entry: Debit to Supplies, Credit to Accounts Payable Dr. Jan 6 Office Supplies 150 Accounts Payable 4. Post to the general ledger: Cr. 150 Solution: (Assuming no adjusting entries are made (Ch. 3) the income statement would be $0, because no transactions have occurred that affect revenue or expense accounts during the month of January. For the balance sheet, remember the basic a...
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