82 Chapter 2 Analyzing Transactions

Indicate for each debit and each credit: (a) whether an asset, liability, owners equity,drawing, revenue, or expense account was affected and (b) whether the account wasincreased () or decreased (). Present your answers in the following form, with trans-action (1) given as an example:

Account Debited Account CreditedTransaction Type Effect Type Effect

(1) asset owners equity

Based upon the T accounts in Exercise 2-4, prepare the nine journal entries from whichthe postings were made. Journal entry explanations may be omitted.

EX 2-5Journal entries

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Identify each of the following accounts of Sesame Services Co. as asset, liability, ownersequity, revenue, or expense, and state in each case whether the normal balance is a debitor a credit.

a. Accounts Payable f. Fees Earnedb. Accounts Receivable g. Office Equipmentc. Billy Eldrod, Capital h. Rent Expensed. Billy Eldrod, Drawing i. Suppliese. Cash j. Wages Expense

EX 2-8Normal balancesof accounts

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During the month, Genesis Labs Co. has a substantial number of transactions affectingeach of the following accounts. State for each account whether it is likely to have (a)debit entries only, (b) credit entries only, or (c) both debit and credit entries.

1. Accounts Payable 5. Insurance Expense2. Accounts Receivable 6. Meg Abdel, Drawing3. Cash 7. Supplies Expense4. Fees Earned

EX 2-7Normal entriesfor accounts

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Based upon the data presented in Exercise 2-4, prepare an unadjusted trial balance,listing the accounts in their proper order.

EX 2-6Trial balance

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Total Debit column: $45,400

The following table summarizes the rules of debit and credit. For each of the items (a)through (l), indicate whether the proper answer is a debit or a credit.

NormalIncrease Decrease Balance

Balance sheet accounts:Asset Debit (a) (b)Liability Credit (c) (d)Owners equity:

Capital (e) Debit (f)Drawing (g) (h) Debit

Income statement accounts:Revenue (i) (j) (k)Expense (l) Credit Debit

EX 2-9Rules of debitand credit

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As of January 1, Oh Kwon, Capital, had a credit balance of $37,100. During the year,withdrawals totaled $1,000, and the business incurred a net loss of $52,300.a. Calculate the balance of Oh Kwon, Capital, as of the end of the year.

EX 2-10Capital accountbalance

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