Question

For your main Discussion post, list at least one of each transaction related to all of the following business events:

1. Purchase of goods or services for cash
2. Providing services for cash
3. Providing services on account
4. Purchase of goods or services on account
5. Payment of a previously recorded expense
6. Receipt of a previously recorded revenue earned

Be sure to explain your logic in the analysis of your business transactions and do not repeat examples from the textbook. Also, list the type of source documents that may serve as evidence for each accounting transaction. Here is an example of a purchase of goods for cash:

My Company purchased $1,000 of supplies during the current accounting period; payment was made at the time of purchase. The source I would need is a sales receipt from the company from which I purchased the supplies.

Additionally, for each business transaction presented, answer these questions:

1. Which accounts are affected for each transaction?
2. How is each account affected (debit or credit, increase or decrease), specifically?

For example, given the above scenario:

The Supplies account, which is an asset account, would be increased (a debit) for $1,000 and the Cash account, also an asset account, would be decreased (a credit) for the same amount.

Lastly, assume one of the six transactions listed above was not entered in the accounting records in error. How would the trial balance be affected, specifically? For example, given the above scenario:

If the transaction were not journalized and posted to the ledger, the Supplies account would be understated and the Cash account would be overstated. Because both accounts are asset accounts, the trial balance debit column in total would not be affected.

For your replies, consider the following questions: Do you agree with the account classifications, debits/credits, and increases/decreases presented by others in class? Why or why not? What new insight have you gained about analyzing, journalizing, and posting transactions? How has the discussion impacted your understanding of the first steps in the accounting cycle? Support your responses with further research and/or additional examples.

Answer 1

1. Purchase of goods or services on account . My company purchased $2000 of supplies during current accounting period on credit. The source i needed here is a credit sales invoice instead of a cash sales invoice.

In the above case,

The Supplies account, which is an asset account, would be increased (a debit) for $2,000 and the parties account, nominal account, would be decreased (a credit) for the same amount.

Yes, I agree with the account classifications, debits/credits presented by others in the class since those are the terms suitable for accounting standards.

In computerized accounting format , we can record transactions in invoice mode as well as in journal format. Its better to record immediate purchase and sales enteries in single entry/ invoice mode. For enteries other than cash related transactions , i prefer to use the journal entry mode.