ACC205
Basic Accounting Equations
Shereka Pierce
ACC205
Jennifer Salas
June 12, 2013
Week One Exercise Assignment
Basic Accounting Equations
1. Recognition of normal balances
The following items appeared in the accounting records of Triguero’s, a retail music store that also sponsors concerts. Classify each of the items as an asset, liability, revenue, or expense from the company’s viewpoint. Also indicate the normal account balance of each item. Classification Normal Balance
a. The albums, tapes, and CDs held for sale to customers A Debit
b. A long-term loan owed to Citizens Bank L Credit
c. Promotional costs to publicize a concert E Debit
d. Daily sales of merchandise sold, R Credit
E. Amounts due from customers A Debit
f. Land held as an investment A Debit
g. A new fax machine purchased for office use A Debit
h. Amounts to be paid in 10 days to suppliers L Credit
I. Amounts paid to a mall for rent E Debit
2. Basic journal entries. The following pertain to the Jennifer Royall Company:
Apr. 1 Jennifer Royall invested cash of $15,000 and land valued at $10,000 into the business. Cash 15,000 Land 10,000 Owners’ Equity 25,000 (Investment by owner)
Shereka Pierce
ACC205
Jennifer Salas
June 12, 2013
Week One Exercise Assignment
Basic Accounting Equations
1. Recognition of normal balances
The following items appeared in the accounting records of Triguero’s, a retail music store that also sponsors concerts. Classify each of the items as an asset, liability, revenue, or expense from the company’s viewpoint. Also indicate the normal account balance of each item. Classification Normal Balance
a. The albums, tapes, and CDs held for sale to customers A Debit
b. A long-term loan owed to Citizens Bank L Credit
c. Promotional costs to publicize a concert E Debit
d. Daily sales of merchandise sold, R Credit
E. Amounts due from customers A Debit
f. Land held as an investment A Debit
g. A new fax machine purchased for office use A Debit
h. Amounts to be paid in 10 days to suppliers L Credit
I. Amounts paid to a mall for rent E Debit
2. Basic journal entries. The following pertain to the Jennifer Royall Company:
Apr. 1 Jennifer Royall invested cash of $15,000 and land valued at $10,000 into the business. Cash 15,000 Land 10,000 Owners’ Equity 25,000 (Investment by owner)