Accounting

Basic Accounting Equations

ACC/205

Bruce Geddes

August 10, 2014

1. Recognition of normal balances

The following items appeared in the accounting records of Triguero's, a retail music store that also sponsors concerts. Classify each of the items as an asset, liability; revenue; or expense from the company's viewpoint. Also indicate the normal account balance of each item.

Classification Normal Balance

a. Amounts paid to a mall for rent. E Debit

b. Amounts to be paid in 10 days to suppliers. L Credit

c. A new fax machine purchased for office use. A Debit

d. Land held as an investment. A Debit

e. Amounts due from customers. A Debit

f. Daily sales of merchandise sold. R Credit

g. Promotional costs to publicize a concert. E Debit

h. A long-term loan owed to Citizens Bank. L Credit

i. The albums, tapes, and CDs held for sale to customers. A Debit

2. Basic journal entries

The following transactions pertain to the Jennifer Royall Company:

May 1 | Jennifer Royall invested cash of $25,000 and land valued at $15,000 into the business.Cash: 25,000 Land: 15000 Owner’s Equity (Investment by Owner) : 40,000 |

5 | Provided $1,000 of services to Jason Ratchford, a client, on account.Accounts Receivable: $1000Revenue: $1000(Services on Account)

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9 | Paid $1,250 of salaries to an employee.Salary: 1,250...