Usually starts with the balance sheet accounts and

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Accounting
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Chapter 2 / Exercise 2
Accounting
Reeve/Warren
Expert Verified
usually starts with the balance sheet accounts and follows with the income statement accounts.
Helpful HintOn the textbook's front endpapers, you also will find an expanded chart of accounts.In this and the next two chapters, we will be explaining the accounting for Pioneer Advertising Agency Inc. (a service company). Accounts 101–199 indicate asset accounts; 200–299 indicate liabilities; 301–350 indicate stockholders' equity accounts; 400–499, revenues; 601–799, expenses; 800–899, other revenues; and 900–999, other expenses. Illustration 2-19shows Pioneer's chart of accounts. Accounts listed in red are used in this chapter; accounts shown in black are explained in later chapters.Illustration 2-19Chart of accounts for Pioneer Advertising Agency Inc.
We have textbook solutions for you!
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Accounting
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Chapter 2 / Exercise 2
Accounting
Reeve/Warren
Expert Verified
You will notice that there are gaps in the numbering system of the chart of accounts for Pioneer Advertising. Companies leave gaps to permit the insertion of new accounts as needed during the life of the business.The Recording Process IllustratedIllustrations 2-20through 2-29(pages 69–73) show the basic steps in the recording process, using the October transactions of Pioneer Advertising Agency Inc. Pioneer's accounting period is a month. In these illustrations, a basic analysis, an equation analysis, and a debit-credit analysis precede the journal entry and posting of each transaction. For simplicity, we use the T-account form to show the posting instead of the standard account form.Study these transaction analyses carefully. The purpose of transaction analysis is first to identify the type of account involved, and then to determine whether to make a debit
or a credit to the account.You should always perform this typeof analysis before preparing a journal entry. Doing so will help you understand the journal entries discussed in this chapter as well as more complex journal entries in later chapters.In addition, an Accounting Cycle Tutorial is available in WileyPLUS.It provides an interactive presentation of the stepsin the accounting cycle, using the examples in the illustrations onthe following pages.Illustration 2-20Investment of cash by stockholders
Helpful HintFollow these steps:1.Determine what type of account is involved.2.Determine what items increased or decreased and by how much.3.Translate the increases and decreases into debits and credits.Illustration 2-21Purchase of office equipmentIllustration 2-22Receipt of cash for future service
Illustration 2-23Payment of monthly rent
Illustration 2-24Payment for insurance
Illustration 2-25Purchase of supplies on credit
Illustration 2-26Hiring of employees
Illustration 2-27Declaration and payment of dividend
Illustration 2-28Payment of salaries
Illustration 2-29Receipt of cash for services performed
> DO IT!PostingKate Browne recorded the following transactions in a general journal during the month of March.
Post these entries to the Cash account of the general ledger to determine its ending balance. The beginning balance of Cash on March 1 was $600.

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