Question

See the Chart of Accounts in exhibit 2 in the book. It lists 16 accounts.

From that chart of accounts, select an account, other than cash (try to pick one that has not been discussed yet). In the subject box of the discussion, put the account title you selected. Answer the following questions:

1. Assets, Liabilities, Owner's Equity, Revenues, and Expenses are the five categories (account types) that an account can be classified as. Which category is the account you selected included in?

2. The double-entry accounting system has specific rules for recording debits and credits based on the type of account. Describe how these rules apply to the account you selected. How is the account increased and how is it decreased?

3. The normal balance of an account can be either a debit or a credit depending on whether increases in the account are recorded as debits or credits. What is the normal balance of the account you selected?

4. Think of a transaction that your account would be used in. Do not copy an entry from the book. Describe the transaction and show the journal entry, in the proper journal entry format.

Post your initial response, read all of the posts, and post two detailed replies to at least two other student's, who selected a different account than you did.

The following example is for Cash:

1. Cash is an asset.
2. Cash is increased with a debit and decreased with a credit.
3. The normal balance of cash is a debit.
4. The journal entry to purchase $150 of supplies with cash is:

Dec. 1	Supplies			150
	Cash				150

  

Answer 1

1) Notes Payable is a liability

2) Notes Payable is increased with a credit and decreased with a debit

3) The normal balance of Notes Payable is a Credit

4) Journal entry to repay Notes Payable with cash is:

Date	Particulars			Debit	Credit
1-Jan	Notes Payable			$ 1,000.00
	To Cash				$ 1,000.00