Question

Analyze each of the transactions by filling in the chart.

Apply the Rules of Accounting. Use your handout.

Date

Accounts involved in transaction?

Classification of the account?

Increasing or Decreasing?

Debit or Credit the Account?

June 1

Parker, the owner, opened an accounting firm contributing $13,200 cash and office furniture worth $5,300

in exchange for capital.

In other words the business is just starting out. The owner invested cash and furniture into it.

Cash

Asset

Increasing

Debit

Office Furniture

Asset

Increasing

Debit

Parker, Capital

Capital

Increasing

Credit

The above transaction is called a "compound entry." That just means that there were more than two accounts

involved in the transaction. Compound entries are quite common. You will see more of them later this semester!

Always remember that the total debits MUST EQUAL the total credits with a compound entry! June 5 Paid (cash) for monthly rent of $1,300. June 9 Purchased office supplies on account, $600.

June 14

Paid (cash) for employee's salary, $1,900.

June 18

Received a bill for utilities to be paid next month, $370.

Utilities Expense

Expense

Increasing

Debit

$                  370

Utilities Payable

Liability

Increasing

Credit

$                  370

June 21

Paid $500 (cash) of the accounts payable created on June 9.

June 25

Performed accounting services on account, $5,700.

June 28

Parker withdrew cash of $6,700.

The owner took $6,700 out of the business (or cash register) to pay himself.

Cash

Asset

Decreasing

Credit

Parker, Withdrawals

Contra

Increasing

Debit

Capital

Answer 1

Date	Accounts involved in transaction?	Classification of the account?	Increasing or Decreasing?	Debit or Credit the Account?	Amount
June 1	Parker, the owner, opened an accounting firm contributing $13,200 cash and office furniture worth $5,300
	Cash	Asset	Increasing	Debit	13,200
	Office Furniture	Asset	Increasing	Debit	5,300
	Parker, Capital	Capital	Increasing	Credit	18,500
June 5	Paid (cash) for monthly rent of $1,300
	Rent expense	Expense	Increasing	Debit	1,300
	Cash	Asset	Decreasing	Credit	1,300
June 9	Purchased office supplies on account, $600.
	office supplies	Asset	Increasing	Debit	600
	Account payable	Liability	Increasing	Credit	600
June 14	Paid (cash) for employee's salary, $1,900.
	salary expense	Expense	Increasing	Debit	1,900
	Cash	Asset	Decreasing	Credit	1,900
June 18	Received a bill for utilities to be paid next month, $370.
	Utilities Expense	Expense	Increasing	Debit	370
	Utilities Payable	Liability	Increasing	Credit	370
June 21	Paid $500 (cash) of the accounts payable created on June 9.
	Account payable	Liability	Decreasing	Debit	500
	Cash	Asset	Decreasing	Credit	500
June 25	Performed accounting services on account, $5,700.
	Account receivable	Asset	Increasing	Debit	5,700
	Service revenue	Revenue	Increasing	Credit	5,700
June 28	Parker withdrew cash of $6,700.
	Cash	Asset	Decreasing	Credit	6,700
	Parker, Withdrawals	Contra - Capital	Increasing	Debit	6,700