Exam 3: The Double-Entry Framework

Services on account increase a revenue account and increase the cash account.

Match the terms with the definitions. -The difference between the footings of an account.

When debits equal credits for a transaction,the accounting equation is in balance.

Analyze the following transactions using the T account approach.Place the dollar amounts on the debit and credit sides.Indicate next to each entry the number for that transaction.After all transactions have been recorded,foot the accounts where necessary and enter the balance in the proper place for each account. 1.Nick Bowman invested cash of $12,000 in the business. 2.Received and paid utility bill of $125. 3.Bought $300 of supplies on account. 4.Sold services worth $2,500 to customers on account. 5.Received cash payment of $800 from credit customers. Cash Accounts Receivable Supplies Accounts Payable Owner's Capital Utilities Expense Revenue

Doug Allen has decided to go into the insect extermination business and to operate as Doug's Extermination Service.The following transactions were completed during the first month of operations,May,20--. Enter the transactions in the T accounts,then enter the total of each column.If an account has entries on both sides,determine the balance and enter it on the side with the larger total. 1. Doug invested $\$ 35,000$ cash in the business. 2. Purchased extermination equipment for $\$ 17,000$ in cash. 3. Paid $\$ 700$ rent for garage and office quaters. 4. Purchased chemicals (expense) for $\$ 1,100$ from Low Glow Chem Co. on account. 5. Received $\$ 1,600$ revenue for extermination service. 6. Paid telephone bill, $\$ 120$ 7. Paid assistant's salary, $\$ 700$ . 8. Earned $\$ 980$ revenue for extermination service, on account. 9. Paid electric bill, $\$ 230$ . 10. Paid for truck repairs (expense), $\$ 145$ . 11. Paid $\$ 600$ to Low Glow Chem Co., on account. 12. Paid $\$ 131$ for gas and oil for truck (expense). 13. Received $\$ 1,400$ revenue for extermination service. 14. Received $\$ 500$ for services previously earned on account in transaction (8). 15. Paid assistant's salary, $\$ 900$ . ​ Cash ​ Accounts Receivable ​ Extermination Equipment ​ Accounts Payable ​ D. Allen, Capital ​ Extermination Revenue ​ Rent Expense ​ Wages Expense ​ Truck Expense ​ Electricity Expense ​ Telephone Expense Chemical Expense

If services for the month total $3,300 in cash and $700 on account,Accounts Receivable increases $700.

If services for the month total $7,000 in cash and $1,500 on account,the revenue account increases $5,500.

A trial balance is a list of all accounts showing the title and balance of each account.

Payment of a telephone bill represents an increase in a(n)

The purchase of an asset on account and making a partial payment results in all of the following EXCEPT

The capital account

An increase or decrease in any asset,liability,owner's equity,revenue,or expense is always accompanied by an offsetting change within the basic accounting elements.

If services for the month total $3,300 in cash and $700 on account,the cash account increases $700.

Elysa paid $135 for utilities for her office; this transaction increased Cash and the expense account.

Withdrawals of cash and other assets by the owner for personal reasons decrease owner's equity.

The balance of a T account is on the side with the larger footing.

A list of all accounts showing the account title and the balance of each account is called a(n)____________________.

A debit represents an increase in

Match the terms with the definitions. -The total dollar amounts on the debit and credit sides of an account.