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.
Accounting is the process of recording, reporting, and analyzing financial transactions during the year.
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.
Journalizing transactions John Daniel opened a medical practice in Sacramento, California, and had the following transactions during the month of January.
Jan. 1 The business received $34,000 cash and issued common stock to Daniel.
2 Purchased medical supplies on account, $17,000.
4 Performed services for patients receiving $1,600.
12 Paid monthly office rent of $3,000.
15 Recorded $7,000 revenue for services rendered to patients on account.
Journalize the transactions of John Daniel, M.D. Include an explanation with each entry.
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:
Office Supplies 1,200
Accounts Receivable 10,500
Accounts Payable 3,800
Unearned Revenue 0
Common Stock 46,200
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.
Question: Journalizing transactions, posting journal entries to T-accounts, and preparing a trial balance
Vince York practices medicine under the business title Vince York, M.D. During July, the medical practice completed the following transactions:
Jul. 1 York contributed $63,000 cash to the business in exchange for common stock.
5 Paid monthly rent on medical equipment, $510.
9 Paid $23,000 cash to purchase land to be used in operations.
10 Purchased office supplies on account, $1,600.
19 Borrowed $22,000 from the bank for business use.
22 Paid $1,100 on account.
28 The business received a bill for advertising in the daily newspaper to be paid in August, $240.
31 Revenues earned during the month included $6,400 cash and $6,000 on account.
31 Paid employees’ salaries $2,200, office rent $1,900, and utilities $560. Record as a compound entry.
31 The business received $1,120 for medical screening services to be performed next month.
31 Paid cash dividends of $7,200.
The business uses the following accounts: Cash; Accounts Receivable; Office Supplies; Land; Accounts Payable; Advertising Payable; Unearned Revenue; Notes Payable; Common Stock; Dividends; Service Revenue; Salaries Expense; Rent Expense; Utilities Expense; and Advertising Expense.
Requirements 1. Journalize each transaction. Explanations are not required
Your friend, Dean McChesney, requested that you advise him on the effects that certain transactions will have on his business, A-Plus Travel Planners. Time is short, so you cannot journalize the transactions. Instead, you must analyze the transactions without a journal. McChesney will continue the business only if he can expect to earn a monthly net income of $6,000. The business completed the following transactions during June:
a. McChesney deposited $10,000 cash in a business bank account to start the company. The company issued common stock to McChesney.
b. Paid $300 cash for office supplies.
c. Incurred advertising expense on account, $700.
d. Paid the following cash expenses: administrative assistant’s salary, $1,400; office rent, $1,000.
e. Earned service revenue on account, $8,800.
f. Collected cash from customers on account, $1,200.
2. Post the transactions directly to the accounts without using a journal. Record each transaction by letter. Calculate account balances.
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