EPPD1033 PRINCIPLES OF ACCOUNTING
TUTORIAL 2
BE 161
For each of the following accounts indicate the effect of a debit or a credit on the account and
the normal balance. Increase (+), Decrease (–).
Debit_ _Credit_ Normal
Balance
1. Salaries and wages expense. ________ ________ ________
2. Accounts receivable. ________ ________ ________
3. Service revenue. ________ ________ ________
4. Owner’s Capital. ________ ________ ________
5. Owner’s Drawings. ________ ________ ________
BE 162
For each of the following transactions of Neon Garden, identify the account to be debited and
the account to be credited.
1. Purchased 18-month insurance policy for cash.
2. Paid weekly payroll.
3. Purchased supplies on account.
4. Received utility bill to be paid at later date.
BE 163
Journalize the following business transactions in general journal form. Identify each transaction
by number. You may omit explanations of the transaction.
1. Andrew Bird invested $30,000 cash to start an appliance repair business.
2. Hired an employee to be paid $400 per week, starting tomorrow.
3. Paid two years’ rent in advance, $7,440.
4. Paid the worker’s weekly wage.
5. Recorded revenue earned and received for the week, $1,900.
BE 165
Journalize the following transactions for Xiu Xiu Company for June 2012, the company’s first
month of operations. You may omit explanations for the transactions.
1. Purchased equipment on account for $7,000.
2. Billed customers $5,000 for services performed.
3. Made payment of $2,300 on account for equipment purchased earlier in month.
4. Collected $2,900 on customer accounts.
BE 167
The transactions of the Liberty Belle Store are recorded in the general journal below. You are to
post the journal entries to T-accounts.
General Journal
_____________________________________________________________________________
Date Account Titles Debit Credit
_____________________________________________________________________________
2012
Aug. 5 Accounts Receivable 3,400
Service Revenue 3,400
10 Cash 3,000
Service Revenue 3,000
19 Rent Expense 1,100
Cash 1,100
25 Cash 1,400
Accounts Receivable 1,400
Ex. 171
Under a double-entry system, show how the entry in each statement is entered in the ledger by
using debit or credit to indicate the increase or decrease in the affected account.
Debit or Credit
1. An increase in Salaries and Wages Expense. ___________________
2. A decrease in Accounts Payable. ___________________
3. An increase in Prepaid Insurance. ___________________
4. An increase in Owner's Capital. ___________________
5. A decrease in Office Supplies. ___________________
6. An increase in Owner's Drawings. ___________________
7. An increase in Service Revenue. ___________________
8. A decrease in Accounts Receivable. ___________________
9. An increase in Rent Expense. ___________________
10. A decrease in Store Equipment. ___________________
Ex. 179
Journalize the following business transactions in general journal form. Identify each transaction
by number. You may omit explanations of the transactions.
1. The owner, Athena Lu, invests $35,000 in cash in starting a real estate office operating as
a sole proprietorship.
2. Purchased $400 of supplies on credit.
3. Purchased equipment for $8,000, paying $2,000 in cash and signed a 30-day, $6,000,
note payable.
4. Real estate commissions billed to clients amount to $4,000.
5. Paid $700 in cash for the current month's rent.
6. Paid $200 cash on account for supplies purchased in transaction 2.
7. Received a bill for $600 for advertising for the current month.
8. Paid $2,200 cash for office salaries and wages.
9. Lu withdrew $1,200 from the business for living expenses.
10. Received a check for $3,000 from a client in payment on account for commissions billed in
transaction 4.
Ex. 181
Transactions for Tom Petty Company for the month of October are presented below. Journalize
each transaction and identify each transaction by number. You may omit journal explanations.
1. Invested $40,000 cash in the business.
2. Purchased land costing $28,000 for cash.
3. Purchased equipment costing $12,000 for $3,000 cash and the remainder on credit.
4. Purchased supplies on account for $800.
5. Paid $1,000 for a one-year insurance policy.
6. Received $3,000 cash for services performed.
7. Received $4,000 for services previously performed on account.
8. Paid wages to employees for $2,500.
9. Petty withdrew $1,000 cash from the business.
Ex. 187
Post the following transactions to T-accounts and determine each account's ending balance.
1. Supplies............................................................................................ 2,500
Accounts Payable.................................................................... 2,500
2. Accounts Receivable........................................................................ 4,000
Service Revenue..................................................................... 4,000
3. Cash ................................................................................................. 3,000
Accounts Receivable............................................................... 3,000
4. Accounts Payable............................................................................. 1,000
Cash........................................................................................ 1,000
Ex. 190
L. Phair and Associates is a financial planning service. The account balances at December 31,
2012 taken from ledgers are shown by the following alphabetical list:
Accounts Payable $ 5,000
Accounts Receivable 19,000
Automobiles 27,500
Buildings 100,000
Cash 11,700
Computer 22,000
Computer Software 4,200
Land 42,000
Owner’s Capital 152,900
Notes Payable 95,000
Notes Receivable 8,100
Equipment 15,400
Supplies 800
Technical Library 2,200
Instructions
Prepare a trial balance with the accounts arranged in financial statement order.
