Question

1 2 4 Question 5 Fischer's Management Consulting has the following transactions in August. Aug. Jim Fischer, the owner, invested $14,800 cash in the business. Signed a contract with a customer to provide 90 days of consulting services for $37,500. Paid rent in advance for three months, $2,590. 5 Purchased $500 of supplies on account. 6 Received $1,260 from clients for services provided. 12 Paid suppliers on account $320. 17 Billed clients $1,550 for services performed. Paid secretary $750 salary. 28 Purchased used equipment for $3,800 in exchange for a note payable. Paid the company's owner, Jim Fischer, $1,160 cash for personal use. For each transaction indicate: The basic type of account debited and credited (asset, liability, owner's equity) b. The specific account debited and credited (Cash, Rent Expense, Service Revenue, etc.); and Whether each account is increased or decreased, and by what amount. 27 29 a. c.

Answer 1

Personal Account :

These accounts types are related to persons, which can be artificial as well as natural persons. For Example : Ram Account , shyam account, Abc co ltd account.

Real Accounts

These account types are related to assets or properties. Further they can be classified into tangible and non tangible accounts.

Tangible: which can be touched or seen , for example : cash , building etc.

Nominal Account

These accounts relate to incomes and gains, expenses and losses. For example: – Rent A/c, commission received A/c, salary A/c, wages A/c, conveyance A/c, etc.

121 с D E F H J Amount Specific Type Cash Account Increase/Decrease Increase Basic type 16100 owner's equity G Specific type capital account Increase /Decrease Amount increase 16100 no entry no entry no entry no entry no entry no entry no entry A B 1 Transection Date Basic Type 2 Aug-01 Current Assets 3 4 Aug-02 no entry 5 6 Aug-04 Current Assets 7 8 Aug-05 Current Assets 9 10 Aug-06 Current Assets Prepaid Rent Increase 2590 Current Account Cash Account Decrease 2590 Supplies Increase 500 Current Liabilities Accounts payble increase 500 Cash Account Increase 1440 Income Service Revenue increase 1440 12 Aug-12 Current liabilities Accounts payble Decrease 390 Current Assets Cash Account Decrease 390 13 14 Aug-17 Current Assets Accounts Receivable Increase 1600 Income Service Revenue increase 1600 15 Aug-27 Expense Salaries Expenses Increase 820 Current Assets Cash Account increase 820 16 17 Aug-28 Non Current Assets Equipments Increase 4650 Non Current Liabilities 18 19 Notes Payble increase 4650 20 Aug-29 Capital Account Drawings Increase 1340 Current Assets Cash Account Decrease 1340 21

*There is no Transection occured on August 2 , only a contract was signed.

The drawing account is a capital account. It's debit balance will reduce the owner's capital account balance and the owner's equity.