Question

part three—recording transactions in a general journal
date
class
directions: analyze each of the following transactions into debit and credit parts and choose account titles from the list below. print the letters identifying your choices in the proper answers columns.

account titles
a. accounts payable—casey company
c. advertising expense
g. prepaid insurance
b. accounts receivable—t. sundeen
d. cash
h. sales
e. david dumire, capital
i. supplies
f. david dumire, drawing
j. utilities expense

answers
debit credit
1–2. received cash from owner, david dumire, as an investment. (p. 62) 1. ____ 2. ____
3–4. paid cash for supplies. (p. 63) 3. ____ 4. ____
5–6. paid cash for insurance. (p. 65) 5. ____ 6. ____
7–8. bought supplies on account from casey company. (p. 66) 7. ____ 8. ____
9–10. paid cash on account to casey company. (p. 67) 9. ____ 10. ____
11–12. received cash from sales. (p. 70) 11. ____ 12. ____
13–14. sold services on account to t. sundeen. (p. 71) 13. ____ 14. ____
15–16. paid cash for advertising expense. (p. 72) 15. ____ 16. ____
17–18. received cash on account from t. sundeen. (p. 73) 17. ____ 18. ____
19–20. paid cash to owner, david dumire, for a withdrawal of equity. (p. 74) 19. ____ 20. ____

Explanation:

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Step 1: Identify Debit

When receiving cash from the owner as an investment, Cash (an asset) increases, so we debit Cash (D).

Step 2: Identify Credit

The owner's capital (David Dumire, Capital - E) increases as it's an investment, so we credit David Dumire, Capital (E).

Step 1: Identify Debit

When paying cash for supplies, Supplies (an asset - I) increase, so we debit Supplies (I).

Step 2: Identify Credit

Cash (D) decreases as we pay it out, so we credit Cash (D).

Step 1: Identify Debit

When paying cash for insurance, Prepaid Insurance (an asset - G) increases, so we debit Prepaid Insurance (G).

Step 2: Identify Credit

Cash (D) decreases as we pay it out, so we credit Cash (D).

Answer:

1. D. Cash
2. E. David Dumire, Capital

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