Sample Journal Entry Exercises, Exercises of Online Journalism

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Sample Journal Entry

Exercises

Week 1-Supplemental Information

Debits Credits

Asset accounts……. Increase (+) Decrease (-)

Liability accounts.… Decrease (-) Increase (+)

Owner’s equity

(capital) accounts… Decrease (-) Increase (+)

Balance Sheet Accounts

Debits Credits

Revenue accounts… Decrease (-) Increase (+)

Expense accounts… Increase (+) Decrease (-)

Income Statement Accounts

Credit for increases (+) Debit for decreases (–)

Revenue Accounts

Income Statement Accounts Credit for decreases (–) Debit for increases (+)

Expense Accounts

Less

Increase (Normal Bal.) Decreases Balance sheet accounts: Asset Debit Credit Liability Credit Debit Owner’s Equity: Capital Credit Debit Drawing Debit Credit Income statement accounts: Revenue Credit Debit Expense Debit Credit

Prepare a journal entry for the purchase of a truck on June 3 for $42,500, paying $8,500 cash and the remainder on account. June 3 Truck 42, Cash 8, Accounts Payable 34, Sample Exercise 1

The owner of a proprietorship may

withdraw cash from the business for

personal use. Such withdrawals have the

effect of decreasing owner’s equity.

Drawing Account

Prepare a journal entry on December 29 for the payment of $12,000 to the owner of Smartstaff Consulting Services, Dominique Walsh, for personal use. Dec. 29 Dominique Walsh, Drawing 12, Cash 12, Sample Exercise 3

1. Debit entries only; normal debit balance
2. Debit and credit entries; normal credit balance
3. Debit and credit entries; normal debit balance
4. Credit entries only; normal credit balance
5. Debit and credit entries; normal debit balance
6. Debit entries only; normal debit balance Solution for Sample Exercise 4

On March 1, the cash account balance was

$22,350. During March, cash receipts

totaled $241,880 and the March 31 balance

was $19,125. Determine the cash payments

made during March.

Sample Exercise 5

NetSolutions received an offer from a

local retailer to rent the land purchased

on November 5. The retailer plans to use

the land as a parking lot for its employees

and customers. NetSolutions agreed to

rent the land to the retailer for three

months, with the rent payable in advance.

Dec. 1 NetSolutions receives $360 for

three month’s rent for use of its

land beginning December 1.

1 Cash 11 360 00 Unearned Rent 23 360 00 Received advance payment for three months’ rent on land.

The equality of debits and credits

for each transaction is built into the

accounting equation: Assets =

Liabilities + Owner’s Equity.

Because of this double equality,

this system is called the double-

entry accounting system.

Reference

Warren, C., Reeve, J., & Duchac, J., (2007). Accounting

(22nd ed.). Mason, Ohio: Thomson South-Western

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