A company uses the following accounts: Accounts Payable Cash Prepaid Rent Common Stock Salaries Payable Equipment Supplies. Rent Expense Notes Payable Salaries Expense Required: Indicate which accounts should be debited and which should be credited for the following transactions of the company. Transactions Example: Purchase equipment in exchange for cash. 1. Pay a cash dividend. 2. Pay rent in advance for the next three months. 3. Provide services to customers on account. 4. Purchase office supplies on account. 5. Pay salaries for the current month. Accounts Receivable Utilities Expense Service Revenue Retained Earnings Dividends 6. Issue common stock in exchange for cash. 7. Collect cash from customers for services provided in (3) above. 8. Borrow cash from the bank and sign a note. 9. Pay for the current month's utilities. 10. Pay for office supplies purchased in (4) above. Account Debited Equipment Cash Account Credited

A company uses the following accounts: Accounts Payable Cash Prepaid Rent Common Stock Salaries Payable Equipment Supplies. Rent Expense Notes Payable Salaries Expense Required: Indicate which accounts should be debited and which should be credited for the following transactions of the company. Transactions Example: Purchase equipment in exchange for cash. 1. Pay a cash dividend. 2. Pay rent in advance for the next three months. 3. Provide services to customers on account. 4. Purchase office supplies on account. 5. Pay salaries for the current month. Accounts Receivable Utilities Expense Service Revenue Retained Earnings Dividends 6. Issue common stock in exchange for cash. 7. Collect cash from customers for services provided in (3) above. 8. Borrow cash from the bank and sign a note. 9. Pay for the current month's utilities. 10. Pay for office supplies purchased in (4) above. Account Debited Equipment Cash Account Credited

Financial Accounting: The Impact on Decision Makers

10th Edition

ISBN:9781305654174

Author:Gary A. Porter, Curtis L. Norton

Publisher:Gary A. Porter, Curtis L. Norton

Chapter3: Processing Accounting Information

Section: Chapter Questions

Problem 3.2E

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