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Horngren'S Financial And Managerial Accounting
Found in: Page 90

Short Answer

Accounting uses a double-entry system. Explain what this sentence means

Accounting is the process of recording and reporting business transactions and the sentence means every transaction is recorded by following double-entry book-keeping.

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Step by Step Solution

Definition of Accounting

Accounting is the process of recording, reporting, and analyzing financial transactions during the year.

Meaning of sentence

The accounting uses a double-entry system, this means that every transaction is recorded in dual effect. A transaction is considered to be complete when both aspects of the transaction are recorded in the books.

Most popular questions for Business-studies Textbooks

Journalizing transactions, posting journal entries to four-column accounts, and preparing a trial balance

The trial balance of Shawn Merry, CPA, is dated March 31, 2018: During April, the business completed the following transactions:

Cash 17,000

Office Supplies 1,200

Accounts Receivable 10,500

Land 29,000

Furniture 0

Automobile 0

Accounts Payable 3,800

Unearned Revenue 0

Common Stock 46,200

Dividends 0

Rent Expense 1,000

Salaries Expense 2,500

Service Revenue 11,200

Total Balance $ 61,200 61,200

During April, the business completed the following transactions:

Apr. 4 Collected $6,000 cash from a client on account.

8 Performed tax services for a client on account, $5,500.

13 Paid $3,300 on account.

14 Purchased furniture on account, $4,000.

15 Menning contributed his personal automobile to the business in exchange for common stock. The automobile had a market value of $11,500.

18 Purchased office supplies on account, $1,600.

19 Received $2,750 for tax services performed on April 8.

20 Paid cash dividends of $7,500.

21 Received $4,900 cash for consulting work completed.

24 Received $2,500 cash for accounting services to be completed next month.

27 Paid office rent, $900.

28 Paid employee salary, $1,200.

Requirements 2. Open the four-column ledger accounts listed in the trial balance, together with their balances as of March 31. Use the following account numbers: Cash, 11; Accounts Receivable, 12; Office Supplies, 13; Land, 14; Furniture, 15; Automobile, 16; Accounts Payable, 21; Unearned Revenue, 22; Common Stock, 31; Dividends, 33; Service Revenue, 41; Salaries Expense, 51; and Rent Expense, 52.

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