Review of T Account Placement and Representative Transactions

Transcription

1 Review of T Account Placement and Representative Transactions PART I CHAPTERS 2 THROUGH 5 Review of T Account Placement The following display sums up the placement of T accounts covered in Part I, Chapters 2 5, in relation to the fundamental accounting equation. Italicized accounts are contra accounts. Owner's Assets = Liabilities + + Revenue Expenses + Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Accounts R. P. Cline, Income from Cash Payable Capital Services Wages Expense + Accounts R. P. Cline, Receivable Wages Payable Drawing Rent Expense + Prepaid Income Supplies Insurance Summary Expense Expense Revenue Equipment Advertising Expense Accumulated Depreciation, Utilities Equipment Expense + Insurance Expense Depreciation Expense, Equipment v

2 The following table summarizes the recording of the various transactions described in Part I, Chapters 2 5, and the classification of the accounts involved. Increase or Therefore Debit or Credit Financial Transaction Accounts Involved Class. Decrease Owner invested Cash A I Debit Balance Sheet cash in business R. P. Cline, Capital OE I Credit and of Owner's Bought Equipment A I Debit Balance Sheet equipment Cash A D Credit Balance Sheet for cash Bought Equipment A I Debit Balance Sheet equipment Accounts Payable L I Credit Balance Sheet on account Paid creditor Accounts Payable L D Debit Balance Sheet on account Cash A D Credit Balance Sheet Owner invested Equipment A I Debit Balance Sheet equipment R. P. Cline, Capital OE I Credit and in business of Owner's Sold services Cash A I Debit Balance Sheet for cash Income from Services R I Credit Income Paid rent Rent Expense E I Debit Income for month Cash A D Credit Balance Sheet Bought supplies Supplies Expense E I Debit Income on account Accounts Payable L I Credit Balance Sheet Paid premium Prepaid Insurance A I Debit Balance Sheet for insurance Cash A D Credit Balance Sheet policy Sold services Accounts Receivable A I Debit Balance Sheet on account Income from Services R I Credit Income Paid wages to Wages Expense E I Debit Income employees Cash A D Credit Balance Sheet Bought Equipment A I Debit Balance Sheet equipment, Cash A D Credit Balance Sheet paying a down Accounts Payable L I Credit Balance Sheet payment with the remainder on account Received cash Cash A I Debit Balance Sheet from charge Accounts Receivable A D Credit Balance Sheet customer to apply on account vi

3 (Part I, Chapters 2 5, concluded) Increase Therefore or Debit or Financial Transaction Owner Accounts Involved R. P. Cline, Drawing Class. OE Decrease I Credit Debit of withdrew Owner's cash for personal use Cash A D Credit Balance Sheet Adjusting entry Insurance Expense E I Debit Income for insurance Prepaid Insurance A D Credit Balance Sheet expired Adjusting entry Depreciation Expense E I Debit Income for depreciation Accumulated A I Credit Balance Sheet of assets Depreciation Adjusting entry Wages Expense E I Debit Income for accrued Wages Payable L I Credit Balance Sheet wages Closing entry Revenue accounts R D Debit Income for revenue Income Summary OE Credit accounts Closing entry Income Summary OE Debit for expense Expense accounts E D Credit Income accounts Closing entry Income Summary OE Debit for Income R. P. Cline, Capital OE I Credit Balance Sheet Summary and account (Net Income) of Owner's Closing entry R. P. Cline, Capital OE D Debit Balance Sheet for Drawing R. P. Cline, Drawing OE D Credit and account of Owner's vii

4 PART II CHAPTERS 7 THROUGH 9 Review of T Account Placement The following display sums up the placement of T accounts covered in Part II, Chapters 7 9, in relation to the fundamental accounting equation. Owner's Assets = Liabilities + + Revenue Expenses + Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Notes FICA Tax Interest Income Cash Short Receivable Payable + and Over + Debit Cash Short balance Petty Cash Employees' and Over Fund Income Tax Credit Payroll Tax Payable balance Expense + Change Fund Employees' Medical Insurance Cash Payrol Bank Account Payable Insurance Expense + Prepaid Insurance, Workers' Employees' United Way Payable Compensation + State Unemployment Tax Payable + Federal Unemployment Tax Payable + Workers' Compensation Insurance Payable + Workers' Compensation viii

5 The following table summarizes the recording of transactions covered in Part II, Chapters 7 9, along with a classification of the accounts involved. Increase Therefore or Debit or Financial Transaction Accounts Involved Class. Decrease Credit Recorded non- Cash A I Debit Balance Sheet interest-bearing Notes Receivable A D Credit Balance Sheet note receivable collected by our bank Recorded Miscellaneous Expense E I Debit Income service charge Cash A D Credit Balance Sheet on bank account Recorded Cash A I Debit Balance Sheet interest-bearing Notes Receivable A D Credit Balance Sheet note receivable Interest Income R I Credit Income collected by our bank Recorded NSF Accounts Receivable A I Debit Balance Sheet check received Cash A D Credit Balance Sheet from customer Established a Petty Cash Fund A I Debit Balance Sheet Petty Cash Fund Cash A D Credit Balance Sheet Reimbursed Expenses or E I Debit Income Petty Cash Assets or A Debit Balance Sheet Fund Drawing OE Debit of O. E. Cash A D Credit Balance Sheet Established a Change Fund A I Debit Balance Sheet Change Fund Cash A D Credit Balance Sheet Recorded cash Cash A I Debit Balance Sheet sales (amount Cash Short and Over E Debit Income on cash register Income from Services R I Credit Income tape was greater than cash count) Recorded cash Cash A I Debit Balance Sheet sales (amount Income from Services R I Credit Income on cash register Cash Short and Over R Credit Income tape was less than cash count) ix

6 (Part II, Chapters 7 9, concluded) Transaction Accounts Involved Class. Decrease Recorded the Sales Wages Expense E I Debit Income payroll entry Office Wages Expense E I Debit Income from the FICA Tax Payable L I Credit Balance Sheet payroll register Employees' Income Tax Payable L I Credit Balance Sheet Employees' Medical Insurance Payable L I Credit Balance Sheet Employees' United Way Payable L I Credit Balance Sheet Wages Payable L I Credit Balance Sheet Issued check Wages Payable L D Debit Balance Sheet payable to Cash Cash A D Credit Balance Sheet to pay payroll Issued check to Cash-Payroll Bank transfer cash to Account A I Debit Balance Sheet the payroll bank Cash A D Credit Balance Sheet account Recorded Payroll Tax Expense E I Debit Income employer's FICA Tax Payable L I Credit Balance Sheet payroll taxes Increase or Therefore Debit or Credit Financial State Unemployment Tax Payable L I Credit Balance Sheet Federal Unemployment Tax Payable L I Credit Balance Sheet Recorded deposit Employee's Income Tax of FICA taxes Payable L D Debit Balance Sheet and employees' FICA Tax Payable L D Debit Balance Sheet income tax Cash A D Credit Balance Sheet withheld Paid state State Unemployment unemployment Tax Payable L D Debit Balance Sheet tax Cash A D Credit Balance Sheet Recorded deposit Federal Unemployment of federal Tax Payable L D Debit Balance Sheet unemployment Cash A D Credit Balance Sheet tax Paid for workers' Prepaid Insurance, compensation Workers' Compensation A I Debit Balance Sheet insurance in Cash A D Credit Balance Sheet advance Adjusting entry Workers' Compensation for workers' Insurance Expense E I Debit Income compensation Prepaid Insurance, insurance, Workers' assuming an Compensation A D Credit Balance Sheet additional Workers' Compenamount is owed sation Insurance Payable L I Credit Balance Sheet x

7 PART III CHAPTERS 10 THROUGH 13 Review of T Account Placement The following sums up the placement of T accounts covered in Part III, Chapters 10 13, in relation to the fundamental accounting equation. Italics indicates those accounts that are treated as deductions from the related accounts above them. Owner's Assets = Liabilities + + Revenue Expenses + Debit Credit Debit Credit Debit Credit Debit Credit Debit Credit Merchandise Sales Tax Sales Purchases Inventory Payable + + Unearned Course Fees Allowances Allowances + + Sales Returns and Sales Purchases Discount Discount + Course Fees Freight In Income + Credit Card Expense The following table summarizes the recording of transactions covered in Part III, Chapters 10 13, along with a classification of the accounts involved. Classifications Balance Sheet Income CA Current Assets S Revenue from Sales P & E Property and Equipment CGS Cost of Goods Sold CL Current Liabilities SE Selling Expense LTL Long-Term Liabilities GE General Expenses OI Other Income OE Other Expenses Purchases Returns and xi

8 (continued) Increase Therefore or Debit or Financial Transaction Accounts Involved Class. Decrease Credit Sold merchandise Accounts Receivable CA I Debit Balance Sheet on account Sales S I Credit Income Sold merchandise Accounts Receivable CA I Debit Balance Sheet on account in- Sales S I Credit Income volving sales tax Sales Tax Payable CL I Credit Balance Sheet Issued credit Sales Returns and memo to Allowances S I Debit Income customer for mer- Accounts Receivable CA D Credit Balance Sheet chandise returned Issued credit Sales Returns and memo to Allowances S I Debit Income customer for mer- Sales Tax Payable CL D Debit Balance Sheet chandise returned Accounts Receivable CA D Credit Balance Sheet with sales tax Bought merchan- Purchases CGS I Debit Income dise on account Accounts Payable CL I Credit Balance Sheet Bought merchan- Purchases CGS I Debit Income dise on account Freight In CGS I Debit Income with freight pre- Accounts Payable CL I Credit Balance Sheet paid as a convenience to the buyer Received credit Accounts Payable CL D Debit Balance Sheet memo from sup- Purchases Returns plier for merchan- and Allowances CGS I Credit Income dise returned Paid for trans- Freight In CGS I Debit Income portation charges Cash CA D Credit Balance Sheet on incoming merchandise Sold merchandise, Cash CA I Debit Balance Sheet involving sales Sales S I Credit Income tax, for cash Sales Tax Payable CL I Credit Balance Sheet Sold merchandise Cash CA I Debit Balance Sheet involving sales Credit Card Expense SE I Debit Income tax and the cus- Sales S I Credit Income tomer used a Sales Tax Payable CL I Credit Balance Sheet bank charge card Charge customer Cash CA I Debit Balance Sheet paid bill within Sales Discounts S I Debit Income the discount Accounts Receivable CA D Credit Balance Sheet period xii

9 (Part III, Chapters 10 13, concluded) Increase Therefore or Debit or Financial Transaction Accounts Involved Class. Decrease Credit Paid invoice for Accounts Payable CL D Debit Balance Sheet the purchase of Cash CA D Credit Balance Sheet merchandise Purchases Discounts CGS I Credit Income within the discount period First adjusting Income Summary Debit entry for Merchandise CA & D Credit Balance Sheet merchandise Inventory CGS and inventory Income periodic Second adjusting Merchandise Inventory CA & I Debit Balance Sheet entry for CGS and merchandise Income inventory Income Summary Credit periodic Adjusting entry Unearned Course Fees CL D Debit Balance Sheet for course fees Course Fees Income OI I Credit Income earned (Course Fees Income) Adjusting entry Costs of Goods Sold CGS I Debit Income for merchandise Merchandise Inventory CA D Credit Balance Sheet inventory perpetual, if physical count is less than ledger balance of merchandise inventory Adjusting entry Merchandise Inventory CA I Debit Balance Sheet for merchandise Cost of Goods Sold CGS D Credit Income inventory perpetual, if physical count is greater than ledger balance of merchandise inventory Reversing entry Wages Payable CL D Debit Balance Sheet for adjustment Wages Expense SE or D Credit Income for accrued GE wages xiii