Concept explainers
A fellow accounting student has difficulty understanding how the fundamental
This means that there are two credits and one debit—one debit and one credit on the left side of the equation and the other credit on the right side of the equation. Explain to your fellow student how the equation stays in balance.
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Chapter 2 Solutions
College Accounting (Book Only): A Career Approach
Additional Business Textbook Solutions
Horngren's Accounting (12th Edition)
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Principles of Accounting Volume 2
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- Which of the following statements does not fit the job title? An accounting clerk works out accounting entries. An accounting clerk, together with the owner, compares this year’s and last year’s income statements. An accounting clerk uses software to record accounting entries. An accounting clerk inquires about a suspected error made by the bank.arrow_forwardAccountants have effectively used a system of debits and credits to increase and decrease account balances in the ledger. Explain debit and credit side effects.arrow_forwardBecause every business transaction affects two or more bookkeeping accounts, a double-entry system of accounting is used to record transactions in which: A) additions to one account necessitates a subtraction of the same amount in another account. B) a debit entered on the balance sheet must also be entered on the statement of cash flows. C) a debit adds to an account and a credit subtracts from the same account. D) equal dollar amounts of debits and credits are entered for each transaction.arrow_forward
- An employee working on her first trial balance discovers that the Equipment account has a credit balance of $2500 and a customer's A/R account has a credit balance of $25. Based on the knowledge you have gained in this course and how account balances are recorded and increase/decrease, has the accountant made a mistake in her records or are these situations possible?arrow_forwardChris pays a fee if her bank balance falls below $10 on the statement date. Prior to the statement date, her balance was -$3.46. Then, Chris made a deposit, d, in ample time, so she did not have to pay a fee. a) Write an inequality to represent the situtation, b) Solve the inequality. Describe the meaning of the solution.arrow_forwardWhich of the following would not be recorded as an identifiable accounting transaction? Multiple Choice Hiring a new employee. Putting a deposit down on a new vehicle. O Obtaining a bank loan. O Recelving a deposit from a customer.arrow_forward
- The companies dispose their accounts receivable because _____________ a. of shortage of accounting staff b. there are other ways to earn cash c. billing and collection expense are costly d. the accounts receivable are all goodarrow_forwardIdentify the correct classification of each of the accounts listed. Put a check mark in the appropriate column. Account Asset Liability Owner’s Equity Revenue Expense Accounts Payable Accrued Interest Income Accumulated Depreciation Allowance for Bad Debts Cash in Bank Depreciation Expense Bad Debts Expense Interest Receivable K. De Pedro, Drawing Mortgage Payable Petty Cash Fund Prepaid Insurance Prepaid Interest Professional Fees Repairs and Maintenance Expense Salaries Payable Service Income SSS Premium Expense Supplied on Hand…arrow_forward51. Why does a business prepare a Trial Balance? To show the financial position To calculate the profit and loss To check the arithmetical accuracy of the ledgers To check the cash and bank balancearrow_forward
- 4. In your Workbook, complete each of the following statements with either the word "debit" or the word "credit." A. The Bank account normally has a B. A revenue account normally has a C. An expense account normally has a D. Paying a creditor involves a E. The Drawings account receives a money for personal use. F. A lawyer gives a cash refund to a customer. The Bank account will balance. balance. balance. entry to the creditor's account. entry when the owner withdraws receive a entry and the Revenue account will receive a entry. G. Supplies are bought on credit. The Supplies account will receive a entry and the supplier's account payable will receive a, H. The Drawings account will not normally receive. I. An increase in equity can be thought of as a J. Net income can be thought of as a K. Net loss can be thought of as a L. The owner takes a computer from the business for his personal (perma- nent) use. The Drawings account will receive a entry. entries. to the Capital account. to the…arrow_forwardCould anyone explain this question? indicate the financial statement on which the account’s balance should be found. Also, if the account is shown on a company’s balance sheet, indicate if it should appear in the asset section, liability section, retained earnings section, income section, or stockholders’ equity section. Accounts Receivable Note Receivable Discount on Note Receivable Bank Service Charge Expense Bad Debts Expense Sales Return Liability Interest Revenue Allowance for Doubtful Accounts Cash Over/ Short Interest Receivable Sales Returns and Allowancesarrow_forwardWhich of the following would not be recorded as an identifiable accounting transaction? Multiple Choice Hiring a new employee. O Putting a deposit down on a new vehicle. O Obtaining a bank loan. Receiving a deposit from a customer.arrow_forward
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage Learning