Question

On October 3, 2018, Regal Company purchased $3,600 of supplies on account. In Regal's chart of accounts, the payable account is No. 21. supplies account is No. 15, and the accounts Journalize and insert the posting references for the October 3, 2018, transaction on page 91 of Regal Company's two column journal. Page: 91 ACCOUNT TITLE DOC.POST. REF DATE 、o. DEBIT CREDIT 1 Oxt. 3, 2018 b. and d. Enter a debit balance of $770 as of October 1, 2018. ledger account. Place a chec mark (/) in the Posting Reference column. posting reference for the October 3, 2018, transaction to the accounts. For those boxes in which no entry is required, leave the box blank GENERAL LEDGER Account Supplies Account No. 15 DATE ITEM POST REF DEBIT CREIT BALANCE DEBIT CREDIT □ □□□□ □ Odt. 1, 2018 Balance Oct. 3, 2018

Answer 1

a.

Date	Account title	Doc No.	Post Ref	Debit	Credit
Oct 3 2018	Supplies (Acc No 15)			$3,600
	Accounts payable (Acc No 21)				$3,600

Since, supplies are purchased on account, accounts payable is created which is a liability. An increase in liability is credited.

b and d

Supplies account (Acc no. 15) General ledger

Date	Item	Post Ref	Debit	Credit	Balance
					Debit	Credit
Oct 1 2018	Balance				$770
Oct 3 2018	Accounts payable	21	$3,600		$4,370

There is a debit balance of $770 as on October 1 2018. Further supplies account is debited 3,600 by accounts payable. Total supplies balance is $4,370 (3,600 + 770)

c and d

Accounts payable account (Acc no. 21) General ledger

Date	Item	Post Ref	Debit	Credit	Balance
					Debit	Credit
Oct 1 2018	Balance					$26,200
Oct 3 2018	Supplies	15		$3,600		$29,800

There is a credit balance of $26,200 as on October 1 2018. Further accounts payable account is credited $3,600 by supplies. Total accounts payable balance is $29,800 (26,200 + 3,600)

As supplies is an asset, it has a debit balance while accounts payable, being a liability, has credit balance.

e.

Yes, debit credit rule applies to all companies that prepare financial statements. The dual aspect principle state that every financial transaction affects both debit side and credit side that is either asset or liability. Debit balance of all accounts should be equal to credit balance. This is to ensure accuracy in financial statements.