Study Guide 2

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B. credit. C. debit. D. normal balance. E. T account. Column II. 1. An accounting device used to analyze transactions. (p. 29). 2. An amount recorded on the left ...

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Study Guide 2

SECOND REVISED

Perfect Score

Name Identifying Accounting Terms Analyzing Transactions into Debit and Credit Parts Identifying Changes in Accounts Total

5 20 15 40

Your Score

Pts. Pts. Pts. Pts.

Part One—Identifying Accounting Terms Directions: Select the one term in Column I that best fits each definition in Column II. Print the letter identifying your choice in the Answers column.

Column II

Column I

Answers

A. chart of accounts

1. An accounting device used to analyze transactions. (p. 29)

1.

E

B. credit

2. An amount recorded on the left side of a T account. (p. 29)

2.

C

C. debit

3. An amount recorded on the right side of a T account. (p. 29)

3.

B

D. normal balance

4. The side of the account that is increased. (p. 29)

4.

D

E. T account

5. A list of accounts used by a business. (p. 32)

5.

A

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Chapter 2 • 17

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Part Two—Analyzing Transactions into Debit and Credit Parts Directions: Analyze each of the following transactions into debit and credit parts. Print the letter identifying your choice in the proper Answers columns.

Account Titles A. Cash B. Accounts Receivable— Imagination Station C. Supplies

G. J. Nichols, Drawing H. Sales I. Rent Expense

D. Prepaid Insurance E. Accounts Payable— Suburban Office Supplies F. J. Nichols, Capital

Answers Debit

Credit

1–2. Received cash from owner as an investment. (p. 32)

1.

A

2.

F

3–4. Paid cash for supplies. (p. 33)

3.

C

4.

A

5–6. Paid cash for insurance. (p. 34)

5.

D

6.

A

7–8. Bought supplies on account from Suburban Office Supplies. (p. 35)

7.

C

8.

E

9.

E

10.

A

11–12. Received cash from sales. (p. 38)

11.

A

12.

H

13–14. Sold services on account to Imagination Station. (p. 39)

13.

B

14.

H

15–16. Paid cash for rent. (p. 40)

15.

I

16.

A

17–18. Received cash on account from Imagination Station. (p. 41)

17.

A

18.

B

19–20. Paid cash to owner for personal use. (p. 42)

19.

G

20.

A

9–10. Paid cash on account to Suburban Office Supplies. (p. 36)

18 • Working Papers TE

CENTURY 21 ACCOUNTING, 9TH EDITION

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Name

SECOND REVISED

Date

Class

Part Three—Identifying Changes in Accounts Directions: For each of the following items, select the choice that best completes the statement. Print the letter identifying your choice in the Answers column.

Answers 1. The values of all things owned (assets) are on the accounting equation’s (A) left side (B) right side (C) credit side (D) none of these. (p. 28)

1.

A

2. The values of all equities or claims against the assets (liabilities and owner’s equity) are on the accounting equation’s (A) left side (B) right side (C) debit side (D) none of these. (p. 28)

2.

B

3. An amount recorded on the left side of a T account is a (A) debit (B) credit (C) normal balance (D) none of these. (p. 29)

3.

A

4. An amount recorded on the right side of a T account is a (A) debit (B) credit (C) normal balance (D) none of these. (p. 29)

4.

B

5. The normal balance side of any asset account is the (A) debit side (B) credit side (C) right side (D) none of these. (p. 29)

5.

A

6. The normal balance side of any liability account is the (A) debit side (B) credit side (C) left side (D) none of these. (p. 29)

6.

B

7. The normal balance side of an owner’s capital account is the (A) debit side (B) credit side (C) left side (D) none of these. (p. 29)

7.

B

8. Debits must equal credits (A) in a T account (B) on the equation’s left side (C) on the equation’s right side (D) for each transaction. (p. 32)

8.

D

9. Decreases in an asset account are shown on a T account’s (A) debit side (B) credit side (C) right side (D) none of these. (p. 30)

9.

B

10. Increases in an asset account are shown on a T account’s (A) debit side (B) credit side (C) left side (D) none of these. (p. 30)

10.

A

11. Decreases in any liability account are shown on a T account’s (A) debit side (B) credit side (C) right side (D) none of these. (p. 30)

11.

A

12. Increases in a revenue account are shown on a T account’s (A) debit side (B) credit side (C) left side (D) none of these. (p. 38)

12.

B

13. The normal balance side of any revenue account is the (A) debit side (B) credit side (C) left side (D) none of these. (p. 38)

13.

B

14. The normal balance side of any expense account is the (A) debit side (B) credit side (C) right side (D) none of these. (p. 40)

14.

A

15. The normal balance side of an owner’s drawing account is the (A) debit side (B) credit side (C) right side (D) none of these. (p. 42)

15.

A

COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING

Chapter 2 • 19

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Study Skills Attendance and Promptness Being in the proper place at the proper time is certainly one of the most important things you can do while you are in school. Attendance and promptness affect your grades. If you are not in class, you cannot possibly get all the information that you need to complete all the accounting activities in your lessons. If you are not prompt, you are sure to miss valuable information. A Good Relationship Attendance and promptness also affect the teacher-student relationship. When you are in your seat before class begins every day, you are saying to the teacher, “I believe you have something important to say, and I am ready to learn.” This is the foundation of a good relationship. When you miss a class, you are in effect saying to the teacher, “I do not believe that the class is worth attending.” This is precisely the wrong message to send. You might ask, “How many absences may I have in this class?” When you do, you are telling the teacher that you want to do exactly what is required and no more. This is also the wrong message to send. If you arrive late, you may distract the teacher and all other members of the class. This can result in the wrong kind of attention as well as embarrassment. When some students are a few minutes late, they do not go to the class at all. Even though entering late is not good, it is still better than missing class altogether. Causes of Absence and Tardiness There are a number of things that could cause us to miss a class. Serious illness could be our excuse, but it is seldom the actual cause. Family responsibilities often are blamed, but the real problem is usually a lack of planning. Sometimes we are not prepared for class, and we would rather miss the class than admit we have not completed an assignment. This can be corrected easily by preparing for class. There are also a number of reasons for being late. Car trouble is often the excuse given, but in most cases the actual reason is a lack of proper planning. Not enough time was set aside to allow for any problems that could develop. Preparing properly and allowing enough time to get to class can usually prevent absence and lateness. It makes little sense to miss class or to be late. Getting to class on time every day is the easiest part of making a good grade and a good impression. The good study skills you develop in your accounting class will be valuable as tools to apply in the workplace. Attendance and promptness are key success drivers for all employees.

20 • Working Papers TE

CENTURY 21 ACCOUNTING, 9TH EDITION

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Name

2-1

Date

Class

WORK TOGETHER, p. 31

Determining the normal balance and increase and decrease sides for accounts

Cash Debit Normal Balance Increase

Credit

Debit

Decrease

Decrease

Accounts Rec.—Christine Kelly Debit Normal Balance Increase

Accounts Payable—Miller Supplies

Accounts Pay.—Wayne Office Supplies

Credit

Debit

Decrease

Decrease

Supplies Debit Normal Balance Increase

Credit Normal Balance Increase

Credit Normal Balance Increase

Jeff Dixon, Capital

Credit

Debit

Decrease

Decrease

Credit Normal Balance Increase

Prepaid Insurance Debit Normal Balance Increase

Credit Decrease

Chapter 2 Analyzing Transactions into Debit and Credit Parts • 21

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SECOND REVISED

ON YOUR OWN, p. 31

Determining the normal balance and increase and decrease sides for accounts

Cash Debit Normal Balance Increase

Credit Decrease

Accounts Receivable—Lee McCann Debit Normal Balance Increase

Prepaid Insurance Debit Normal Balance Increase

Decrease

Accounts Payable—Topline Supplies

Credit

Debit

Decrease

Decrease

Accounts Receivable—Sonya Lopez Debit Normal Balance Increase

Credit

Credit Normal Balance Increase

Vickie Monson, Capital

Credit

Debit

Decrease

Decrease

Credit Normal Balance Increase

Supplies Debit Normal Balance Increase

Credit Decrease

22 • Working Papers TE

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Name

2-2

Date

Class

Apr. 6.

Supplies

WORK TOGETHER, p. 37

Analyzing transactions into debit and credit parts Apr. 1.

Cash

100.00

5,000.00

Accts. Pay.—Bales Supplies

Kathy Bergum, Capital 5,000.00

Apr. 2.

Supplies

Apr. 9.

Accts. Pay.—Bales Supplies 50.00

50.00

Cash

Cash 50.00

Apr. 5.

100.00

50.00

Prepaid Insurance 75.00

Cash 75.00

Chapter 2 Analyzing Transactions into Debit and Credit Parts • 23

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SECOND REVISED

ON YOUR OWN, p. 37

Analyzing transactions into debit and credit parts Sept. 1.

Cash

Sept. 6.

Supplies 230.00

2,000.00

Derrick Hoffman, Capital

Accts. Pay.—Nash Supply

2,000.00

Sept. 4.

Prepaid Insurance

Sept. 11.

Accts. Pay.—Nash Supply 115.00

300.00

Cash

Cash

300.00

Sept. 5.

230.00

115.00

Supplies 100.00

Cash 100.00

24 • Working Papers TE

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Name

2-3

Date

Class

WORK TOGETHER, p. 44

Analyzing revenue, expense, and withdrawal transactions into debit and credit parts Apr. 10.

Cash

Apr. 18.

600.00

Cash 425.00

Sales

Accts. Rec.—Sam Erickson 600.00

Apr. 11.

Accts. Rec.—Sam Erickson

Apr. 20.

850.00

Kathy Bergum, Drawing 300.00

Cash

Sales 850.00

Apr. 14.

425.00

300.00

Rent Expense 250.00

Cash 250.00

Chapter 2 Analyzing Transactions into Debit and Credit Parts • 25

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SECOND REVISED

ON YOUR OWN, p. 44

Analyzing revenue, expense, and withdrawal transactions into debit and credit parts Sept. 13.

Cash

Sept. 18.

Cash 250.00

1,500.00

Sales

Accts. Rec.—Jon Roe 1,500.00

Sept. 15.

Accts. Rec.—Jon Roe

Sept. 21.

Derrick Hoffman, Drawing 700.00

500.00

Cash

Sales 500.00

Sept. 16.

250.00

700.00

Utilities Expense 450.00

Cash 450.00

26 • Working Papers TE

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Name

Date

2-1

Class

APPLICATION PROBLEM, p. 46

Determining the normal balance and increase and decrease sides for accounts 1

Account

2

3

Account Classification

4

Account’s Normal Balance Debit

Credit

5

6 Increase Side

Debit

7

8 Decrease Side

Credit

Debit

Credit

Asset







Accts. Rec.—Jens Olefson Asset







Accts. Rec.—Toni Nolan Asset







Supplies

Asset







Prepaid Insurance

Asset







Accts. Pay.—United Co.

Liability







Juan Reo, Capital

Owner’s Equity







Cash

Chapter 2 Analyzing Transactions into Debit and Credit Parts • 27

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APPLICATION PROBLEM, p. 46

Analyzing transactions into debit and credit parts Mar. 5.

Cash

Mar. 1.

Supplies 100.00

1,000.00

Cash

Hal Rosen, Capital

100.00

1,000.00

Mar. 1.

Prepaid Insurance

Mar. 8.

400.00

400.00

Cash

Cash 400.00

Mar. 3.

Accts. Pay.—All Star Company

400.00

Supplies 600.00

Accts. Pay.—All Star Company 600.00

28 • Working Papers TE

COPYRIGHT © SOUTH-WESTERN CENGAGE LEARNING

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SECOND REVISED

Name

2-3

Date

Class

APPLICATION PROBLEM, p. 47

Analyzing revenue, expense, and withdrawal transactions into debit and credit parts Mar. 11.

Cash

Mar. 18.

Hal Rosen, Drawing 500.00

2,200.00

Cash

Sales

500.00

2,200.00

Mar. 12.

Advertising Expense

Mar. 19.

1,000.00

150.00

Accts. Rec.—Dominik Field

Cash 150.00

Mar. 14.

Cash

1,000.00

Accts. Rec.—Dominik Field 1,700.00

Sales 1,700.00

Chapter 2 Analyzing Transactions into Debit and Credit Parts • 29

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APPLICATION PROBLEM, p. 47

Analyzing revenue, expense, and withdrawal transactions into debit and credit parts

Cash

Mar. 25.

Mar. 28.

1,100.00

Hal Rosen, Drawing

450.00

Cash

Sales

450.00

1,100.00

Mar. 26.

Accts. Rec.—Dominik Field

Mar. 29.

500.00

250.00

Sales

Accts. Rec.—Dominik Field 500.00

Mar. 27.

Cash

250.00

Advertising Expense 125.00

Cash 125.00

30 • Working Papers TE

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Name

2-5

Date

Class

MASTERY PROBLEM, p. 48

Analyzing transactions into debit and credit parts

Cash (1) (4) (11) (11) (13) (30)

2,700.00 850.00 1,900.00 900.00 500.00 200.00

(2) (4) (5) (10) (15) (16) (22) (23) (26)

Vickie Lands, Capital 500.00 300.00 275.00 75.00 25.00 50.00 55.00 95.00 400.00

(1) (11)

Vickie Lands, Drawing (26)

700.00

(13)

500.00

(4) (8) (11) (25)

Accts. Rec.—Josie Leveson (25)

450.00

(30)

200.00

(23)

(15)

300.00 200.00 130.00

(2)

Accts. Pay.—North End Supplies

50.00

(9)

500.00

Repair Expense

130.00

(10)

Accts. Pay.—Bethany Supplies (16)

25.00

Rent Expense

275.00

(12)

95.00

Miscellaneous Expense

Prepaid Insurance (5)

850.00 700.00 900.00 450.00

Advertising Expense

Supplies (4) (9) (12)

400.00

Sales

Accts. Rec.—Alston Goff (8)

2,700.00 1,900.00

200.00

(22)

75.00

Utilities Expense 55.00

Chapter 2 Analyzing Transactions into Debit and Credit Parts • 31

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CHALLENGE PROBLEM, p. 49

Analyzing transactions recorded in T accounts 1

2

3

Trans. No.

Accounts Affected

Account Classification

Owner’s Equity

Utilities Expense

Owner’s Equity (Expense) Asset



Equity Miscellaneous Expense Owner’s (Expense)



Cash

Asset

Supplies

Asset

Accts. Pay.—Tri City Supplies

Liability

Cash

Asset

Sales Advertising Expense

Owner’s Equity (Revenue) Owner’s Equity (Expense)

Cash

Asset

Rent Expense

Owner’s Equity (Expense)

Cash

Asset

Cash

Asset

Sales

Owner’s Equity (Revenue)

Cash

Asset

Sales

Owner’s Equity (Revenue)

Supplies

Asset

Cash

Asset

Accts. Pay.—Tri City Supplies

Liability

Cash

Asset

Adriana Janek, Drawing

Owner’s Equity

Cash

Asset

Accts. Rec.— Ralph Dahl Sales

Asset

5.

6.

7.

8.

9.

10.

11.

12.

13.

32 • Working Papers TE

Owner’s Equity (Revenue)

Credit



Adriana Janek, Capital

Cash

4.

Debit

Asset

2.

5

Entered in Account as a

Cash 1.

3.

4

✔ ✔

6 Description of Transaction Received cash from owner as an investment

Paid cash for utilities



Paid cash for miscellaneous expense



Bought supplies on account



Received cash from sales

✔ ✔ ✔ ✔ ✔ ✔ ✔

Paid cash for advertising Paid cash for rent



Received cash from sales



Received cash from sales

✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔ ✔

Paid cash for supplies Paid cash on account Paid cash to owner for personal use Sold services on account

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