CHAPTER 2
(g) A list of accounts and their balances at a specific time
(h) Used to decrease the balance in an asset account
(i) A list of all of a company's accounts
(An accounting record where transactions are recorded in chronological (date) order)
E2-3 Kobayashi Company has the following accounts. Identify the type of account, financial statement, and normal balance.
Account Type of Account Financial Statement Normal Balance
Cash Asset Balance Sheet Debit
M.Kobayashi, Capital Owner's Equity Statement Credit
Accounts Payable Liability Balance Sheet Credit
Building Asset Balance Sheet Debit
Fees Earned Revenue Income Statement Credit
Insurance Expense Expense Income Statement Debit
Interest Revenue Revenue Income Statement Credit
M.Kobayashi, Drawings Owner's Equity Statement Debit
Notes Receivable Asset Balance Sheet Debit
Prepaid Insurance Asset Balance Sheet Debit
Rent Expense Expense Income Statement Debit
Supplies Asset Balance Sheet Debit
Instructions:
Complete the table. Identify:
1. The type of account as asset, liability, or owner's equity. For owner's equity accounts, also identify if it is a capital, drawings, revenue, or expense account.
2. What financial statement it is presented on.
3. The normal balance of the account.
The first one has been done for you as an example.
(b) Explain why the normal balance for each of the different types of accounts is either a debit or credit. Refer to the accounting equation in your explanation. Identify accounts and...
E2-4 In the first month of business, Jakmak Interior Design Company had the following transactions. Determine debits and...
(LO7) Paid $350 cash for advertising the launch of the business.
(LOC) Purchased supplies on account for $1,050.
(LOC) Purchased a used car for $8,770 cash, for use in the business.
(LOC) Billed customers $1,520 for services performed.
(LOC) Borrowed $10,880 from the bank and signed a note payable.
(LOC) Received $1,140 cash from customers billed on March 13.
(LOC) Paid for the supplies purchased on March 9.
(LOC) Received $800 cash from a customer for services to be performed in April.
(LOC) Paid Jackie MacKenzie $1,720 cash for her personal use.
Instructions:
For each transaction, indicate:
(a) Account Debited
(b) Account Credited
(c) Basic Specific Type
(d) Basic Specific Effect
(e) Account +10,220
(f) Effect Owner's Equity
(g) Date
(h) Type
(i) Cash
Mar. 5
Jakmak Interior Design Company journalize the transactions.
Record transactions.
(LO2) Prepare basic analysis.
