|
Chapter 9.6® - How to Analyze Accounting Transactions Part #2
9. Receives Cash for office space rented out. Transaction: Simpsons Corp receives $700 cash for office space it rented out. Analysis: Asset (Cash) increases. Asset (Accounts Receivable) from transaction#8 decreases. Double-Entry Accounting: Debit the Cash account for $700. Credit the Accounts Receivable account for $700.
10. Partial Payment of Accounts Payable from #4 Transaction: Simpsons Corp pays $1,000 for its office printer it purchased in transaction #4. Analysis: Accounts payable decrease (debit). Cash decreases (credit). Double-Entry Accounting: Debit the Accounts Payable for $1,000 and Credit the cash account for $1,000.
11. Withdrawal of Cash by Owner Transaction: Owner of Simpsons Corp withdraws $5,000 cash for personal use. Analysis: Owner’s Withdrawals increase (debit). Cash decrease (credit). Double-Entry Accounting: Debit the Owner’s Withdrawals account for $5,000 and Credit the Cash account for $5,000.
12. Receipt of Cash for Future Service Transaction: Simpsons Corp. receives $8,000 in advance for services to be performed later. Analysis: Cash increase (debit). Unearned Service Revenues increase (credit). Double-Entry Accounting: Debit the Cash account for $8,000. Credit the Unearned Service Revenues account for $8,000.
13. Upfront Payment for Insurance Policy Coverage Transaction: Simpsons Corp. pays $1,600 upfront for a 2 year insurance policy on its building. Analysis: Prepaid insurance increase (debit). Cash decrease (credit). Double-Entry Accounting: Debit the Prepaid Insurance account for $1,600 and credit the Cash account for $1,600.
14. Recognize 1 Month Use of Prepaid Insurance Transaction: 1 month passes since Simpsons Corp prepaid its insurance policy and wants to recognize the expense ($1,600 x 1/24 months = $67) Analysis: Insurance expense increase (debit); Prepaid insurance decrease (credit) Double-Entry Accounting: Debit the Insurance expense account for $67
15. Payment of Electricity Expense in Cash. Transaction: Simpsons Corp. pays its insurance expense for $200 in cash. Analysis: Utilities expense increase (debit); Cash decrease (credit). Double-Entry Accounting: Debit the Utilities expense for $200 and credit the Cash account for $200.
|
© Accounting Scholar | Privacy Policy & Disclaimer | Contact Us |