Question

Some of the ledger accounts for the Sanderson Hardware Company are listed below. For each of the October 2021 transactions numbered 1 through 10 below, indicate by account name which accounts should be debited and which should be credited when preparing journal entries. The company uses the perpetual inventory system. Accounts payable Accounts receivable Supplies expense Retained earnings Deterred sales revenue Coat of goods sold Dividends Equipment cash) Prepaid rent Hotes payable Rent expense Salarioa expanse Inventory Supplies Sales revenue Common stock Salaries payable Interest axpense Account Debited Inventory Account Credited Cash Example: Purchased inventory for cash 1. Paid a cash dividend. 2. Paid rent for the next three months Sold goods to customers an account. (To recard sale of goods to customers.) 3. Sold goods to customers on account. (To record cost of goods sold to customers.) b 4. Purchased inventory an account 5. Purchased supplies for cash. 6. Issued common stock in exchange for cash 7. Collected cash from customers goods sold in 3 9. Borrowed cash from a bank and signed a note 9. At the end of October, recorded the amount of supplies that had been used during the month. 10. Received cash for advance payment from customer

Answer 1

Particulars	Account Debited	Account Credited
Paid a Cash Dividend	Dividend	Cash
Paid rent for the next three months	Prepaid Rent	Cash
Sold Goods to customer on Account(a)	Accounts Receivable	Sales Revenue
Sold Goods to customer on Account(b)	Cost of Goods Sold	Inventory
Purchased inventory on account	Inventory	Accounts Payable
Purchased supplies for cash	Supplies	Cash
Issued common stock in exchange of cash	Cash	Common Stock
collected cash from customer	Cash	Accounts Receivable
borrowed cash from bank and signed a note	Cash	Notes Payable
At end of October recorded amount of supplies that had been used during the month	Supplies Expense	Supplies
Received Cash for advance payment from customer	Cash	Deferred Sales Revenue

Answer 2