1. Payment is due in thirty days. business may only report activities on financial statements that are specifically related to company operations, not those activities that affect the owner personally, Received cash from issuance of common stock, Collected cash from customer sales made in previous month, Paid cash to vendors for supplies delivered last month, Bought supplies, to be paid for next month, Paid for inventory purchased on account last month. Solution: (1). Prepare journal entries to record each of the following sales transactions of a merchandising company. Accrual accounting provides standard guidance (in the United States and throughout much of the world). First, the sale is made and, second, the customer takes possession of the merchandise from the company. Service Revenue has a credit of $1,200. It is a good idea to familiarize yourself with the type of information companies report each year. This too has a balance already from January 10. You will see total assets increase and total stockholders equity will also increase, both by $20,000. Learn more about how Pressbooks supports open publishing practices. You paid on account. Remember that on account means a service was performed or an item was received without being paid for. Define accrual accounting and list its two components. The customer did not immediately pay for the services and owes Printing Plus payment. Any person familiar with accounting procedures could easily read the above entry: based on the debit and credit, both inventory and accounts payable have gone up so a purchase of merchandise for $2,000 on credit is indicated. Why is revenue reported at the time of sale rather than when the cash is eventually collected? Transaction 7: On January 17, 2019, receives $2,800 cash from a customer for services rendered. Accounting is conservative. Cash is increasing, which increases total assets on the balance sheet. The company purchased supplies, which are assets to the business until used. November 14, 2014. https://www.sec.gov/Archives/edgar/data/829224/000082922415000020/filename1.htm, Creative Commons Attribution-NonCommercial-ShareAlike License, https://openstax.org/books/principles-financial-accounting/pages/1-why-it-matters, https://openstax.org/books/principles-financial-accounting/pages/3-5-use-journal-entries-to-record-transactions-and-post-to-t-accounts, Creative Commons Attribution 4.0 International License. The electrical work required for the installation costs $19,950. On January 14, 2019, distributed $100 cash in dividends to stockholders. Transaction 2: On January 5, 2019, purchases equipment on account for $3,500, payment due within the month. Transaction 11: On January 27, 2019, provides $1,200 in services to a customer who asks to be billed for the services. The general journal is maintained essentially on the concept of double entry system of accounting, where each transaction affects at least two accounts. By what percent would your installment price be greater than the cash price , to the nearest tenth percent? Accounts payable is a liability so that a credit indicates that an increase has occurred. When filling in a journal, there are some rules you need to follow to improve journal entry organization. LO 6.3 Record journal entries for the following purchase transactions of Flower Company. Thus, the following journal entry is appropriate2. Debit Cost of Goods Sold $1,900, Credit Merchandise Inventory $1,900 (Merchandise Inventory: $37,800 - Year-end inventory: $35,900). Sold $20,000 of merchandise, which cost $15,000, on Mastercard credit cards. This is posted to the Cash T-account on the debit side beneath the January 17 transaction. Figure 4.7 Journal Entry 4A: Sale Made on Account. There are debit and credit columns, storing the financial figures for each transaction, and a balance column that keeps a running total of the balance in the account after every transaction. Cash had a debit of $20,000 in the journal entry, so $20,000 is transferred to the general ledger in the debit column. There are no expiration dates on our stored value cards, and in most markets, we do not charge service fees that cause a decrement to customer balances. The revenue realization principle provides authoritative direction as to the proper timing for the recognition of revenue. You want the total of your revenue account to increase to reflect this additional revenue. You have mowed lawns and earned more revenue. consent of Rice University. Explain the purpose of the matching principle. The business is started by receiving cash from an investor in exchange for common stock $20,000, The business purchases supplies on account $500, The business purchases furniture on account $2,000, The business renders services to various clients on account totaling $9,000, The business pays this months rent $3,000. A journal keeps a historical account of all recordable transactions with which the company has engaged. This is placed on the debit side of the Salaries Expense T-account. Therefore, you will debit gas expense. Table of contents Top 10 Examples of Journal Entry Example #1 - Revenue Sales Journal Entry: Allowance for Doubtful Accounts Entry: Example #2 - Expense Journal Entry for Accounts Payable: Credit Equipment XXX This book uses the This is posted to the Cash T-account on the debit side. The first transaction analyzed at the start of this chapter was the purchase of inventory on credit for $2,000. Textbook content produced by OpenStax is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike License . This means total assets change by $0, because the increase and decrease to assets in the same amount cancel each other out. Prepare journal entries to record the effect of acquiring inventory, paying salary, borrowing money, and selling merchandise. Debit Loss XXX, Fundamentals of Financial Management, Concise Edition, Don Herrmann, J. David Spiceland, Wayne Thomas, Carl S Warren, James M Reeve, Jonathan E. Duchac. One of the most important elements comprising the structure of U.S. GAAP is accrual accounting, which serves as the basis for timing the reporting of revenues and expenses. Nix'It Company's ledger on July 31, its fiscal year-end, includes the following selected accounts that have normal balances (Nix'It uses the perpetual inventory system). The following are the journal entries recorded earlier for Printing Plus. The next transaction figure of $4,000 is added directly below the $20,000 on the debit side. When you enter information into a journal, we say you are journalizing the entry. The business collects from one of its clients for services rendered earlier in the month $1,500. Transaction 8: On January 18, 2019, paid in full, with cash, for the equipment purchase on January 5. On January 12, 2019, pays a $300 utility bill with cash. Revenue realization principle. A journal is often referred to as the book of original entry because it is the place the information originally enters into the system. (To record is. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field. Chapter 1: Why Is Financial Accounting Important? 3.5Determine whether the balance in each of the following accounts increases with a debit or a credit. Impact on the financial statements: Revenue is reported on the income statement. Rotation system that uses the newest products first, Sells 320 of the oldest units, 30 of the middle, 0 of the newest, Sells 100 of the newest units, 50 of the middle, 0 of the last. On January 12, there was a credit of $300 included in the Cash ledger account. Accounts Receivable is an asset account. In the journal entry, Utility Expense has a debit balance of $300. LO It increases because Printing Plus now has more equipment than it did before. Any time that you perform a service and have not been able to invoice your customer, you will need to record the amount of the revenue earned as accrued revenue . Peruse Best Buys 2017 annual report to learn more about Best Buy. This similarity extends to other retailers, from clothing stores to sporting goods to hardware. LO Answer: The effects produced on the various accounts by a transaction should be entered into the accounting system as quickly as possible so that information is not lost and mistakes have less time to occur. In the initial part of the transaction, the accounts receivable balance goes up $5,000 because the money from the customer will not be collected until a later date. Figure 4.5 Journal Entry 2: Salary Paid to Employees. This creates a liability for the company, Accounts Payable. That entry is recorded above. Transaction 6: On January 14, 2019, distributed $100 cash in dividends to stockholders. Printing Plus has not yet provided the service, meaning it cannot recognize the revenue as earned. The balance in this account is currently $20,000, because no other transactions have affected this account yet. Green 800(Cr) Service Revenue is a revenue account affecting equity. More expenses lead to a decrease in net income (earnings). Estimated useful life (years) 4 3.2Consider the following accounts, and determine if the account is an asset (A), a liability (L), or equity (E). Impact on the financial statements: You have an expense of $300. The best way to master journal entries is through practice. Compute the first-year depreciation using the straight-line method. Want to cite, share, or modify this book? Inventory is an asset that always uses a debit to note an increase. This problem has been solved! Liabilities increase with credit entries. The balance at that time in the Common Stock ledger account is $20,000. The credit is the larger of the two sides ($4,000 on the credit side as opposed to $2,500 on the debit side), so the Accounts Payable account has a credit balance of $1,500. According to a 2017 holiday shopping report from the National Retail Federation, gift cards are the most-requested presents for the eleventh year in a row, with 61% of people surveyed saying they are at the top of their wish lists.6 CEB TowerGroup projects that total gift card volume will reach $160 billion by 2018.7. Cash has a credit of $100. Printing Plus provided the service, thus earning revenue. You have performed the services, your customers owe you the money, and you will receive the money in the future. On Christmas Eve alone $2.5 million gift cards were sold. Cash is an asset and will decrease on the credit side. More revenue will increase net income (earnings), thus increasing retained earnings. Prepare the necessary journal entries for the following transactions of Almez Co. 1st of December Almez Co. received a $20,000, 4-month, 6% promissory note from the Drew Company for the swap and Accounts receivable. As you can see, there is one ledger account for Cash and another for Common Stock. Impact on the financial statements: You have revenue of $5,500. LO 6.3 Record journal entries for the following purchase transactions of Apex Industries. Larger grocery chains might have multiple deliveries a week, and multiple entries for purchases from a variety of vendors on their accounts payable weekly. Accounts Payable has a debit of $3,500 (payment in full for the Jan. 5 purchase). Cash is an asset, and assets increase on the debit side. Services are performed for customers for a total of $4,500. Expenses are reported on the income statement. To find the account balance, you must find the difference between the sum of all figures on the side that increases and the sum of all figures on the side that decreases. Accountants use special forms called journals to keep track of their business transactions. In the debit column for this cash account, we see that the total is $32,300 (20,000 + 4,000 + 2,800 + 5,500). For the transactions during the month of April-2019, firstly, the journal entries are posted and based on which the T- Accounts are prepared as follows: Journal Entry Capital Account Bank Account Prepaid Rent Account Computer Equipment Account Furniture Account Office Expense Account Salary Account Rent Account Conclusion You will notice that the transactions from January 3, January 9, and January 12 are listed already in this T-account. citation tool such as, Authors: Mitchell Franklin, Patty Graybeal, Dixon Cooper, Book title: Principles of Accounting, Volume 1: Financial Accounting. Question: Assume that after the above balances were determined, several additional transactions took place. Explain the purpose of the matching principle. 3.1Match the correct term with its definition. To decrease the total cash, credit the account because asset accounts are reduced by recording credit entries. Debits and credits are used for this purpose. In other words, the figure being reported is either a debit or credit based on what makes that particular type of account increase. Cash This current listing of accounts is commonly referred to as a trial balance. The record is placed on the credit side of the Accounts Receivable T-account across from the January 10 record. Prepare journal entries for each of the above transactions. LO Mastercard charges a 5% fee. April 1 Sold merchandise for $3,000, with credit terms n/30; invoice dated April 1. If you are redistributing all or part of this book in a print format, Chapter 10: In a Set of Financial Statements, What Information Is Conveyed about Property and Equipment? Service Revenue has a credit balance of $2,800. Terms of the sale are 2/10, n/60; the invoice is dated November 5. In the journal entry, Equipment has a debit of $3,500. Debit Merchandise Inventory, Credit Accounts Payable Accounts Receivable has a credit of $5,500 (from the Jan. 10 transaction). Answer: When faced with debits and credits, everyone has to practice at first. Expenses are matched with revenues. Retained Earnings at January 1, 2018, was $3,600. As a smaller grocery store, Colfax does not offer the variety of products found in a larger supermarket or chain. Question: Debit and credit rules are best learned through practice. Liability accounts decrease with debit entries. then you must include on every digital page view the following attribution: Use the information below to generate a citation. Explain the purpose of the revenue realization principle. The final balance in the account is $24,800. These reports have much more information than the financial statements we have shown you; however, if you read through them you may notice some familiar items. You notice there is already a credit in Accounts Payable, and the new record is placed directly across from the January 5 record. 9/1 Bob Baker invested $50,000 cash to start the business, Baker Co. 9/3 Paid $1,500 for September rent. It is important to understand that T-accounts are only used for illustrative purposes in a textbook, classroom, or business discussion. No matter the size of a company and no matter the product a company sells, the fundamental accounting entries remain the same. Green 300 (D)Allowance for doubtful accounts 300(Cr) are licensed under a, Use Journal Entries to Record Transactions and Post to T-Accounts, Explain the Importance of Accounting and Distinguish between Financial and Managerial Accounting, Identify Users of Accounting Information and How They Apply Information, Describe Typical Accounting Activities and the Role Accountants Play in Identifying, Recording, and Reporting Financial Activities, Explain Why Accounting Is Important to Business Stakeholders, Describe the Varied Career Paths Open to Individuals with an Accounting Education, Describe the Income Statement, Statement of Owners Equity, Balance Sheet, and Statement of Cash Flows, and How They Interrelate, Define, Explain, and Provide Examples of Current and Noncurrent Assets, Current and Noncurrent Liabilities, Equity, Revenues, and Expenses, Prepare an Income Statement, Statement of Owners Equity, and Balance Sheet, Describe Principles, Assumptions, and Concepts of Accounting and Their Relationship to Financial Statements, Define and Describe the Expanded Accounting Equation and Its Relationship to Analyzing Transactions, Define and Describe the Initial Steps in the Accounting Cycle, Analyze Business Transactions Using the Accounting Equation and Show the Impact of Business Transactions on Financial Statements, Explain the Concepts and Guidelines Affecting Adjusting Entries, Discuss the Adjustment Process and Illustrate Common Types of Adjusting Entries, Record and Post the Common Types of Adjusting Entries, Use the Ledger Balances to Prepare an Adjusted Trial Balance, Prepare Financial Statements Using the Adjusted Trial Balance, Describe and Prepare Closing Entries for a Business, Apply the Results from the Adjusted Trial Balance to Compute Current Ratio and Working Capital Balance, and Explain How These Measures Represent Liquidity, Appendix: Complete a Comprehensive Accounting Cycle for a Business, Compare and Contrast Merchandising versus Service Activities and Transactions, Compare and Contrast Perpetual versus Periodic Inventory Systems, Analyze and Record Transactions for Merchandise Purchases Using the Perpetual Inventory System, Analyze and Record Transactions for the Sale of Merchandise Using the Perpetual Inventory System, Discuss and Record Transactions Applying the Two Commonly Used Freight-In Methods, Describe and Prepare Multi-Step and Simple Income Statements for Merchandising Companies, Appendix: Analyze and Record Transactions for Merchandise Purchases and Sales Using the Periodic Inventory System, Define and Describe the Components of an Accounting Information System, Describe and Explain the Purpose of Special Journals and Their Importance to Stakeholders, Analyze and Journalize Transactions Using Special Journals, Describe Career Paths Open to Individuals with a Joint Education in Accounting and Information Systems, Analyze Fraud in the Accounting Workplace, Define and Explain Internal Controls and Their Purpose within an Organization, Describe Internal Controls within an Organization, Define the Purpose and Use of a Petty Cash Fund, and Prepare Petty Cash Journal Entries, Discuss Management Responsibilities for Maintaining Internal Controls within an Organization, Define the Purpose of a Bank Reconciliation, and Prepare a Bank Reconciliation and Its Associated Journal Entries, Describe Fraud in Financial Statements and Sarbanes-Oxley Act Requirements, Explain the Revenue Recognition Principle and How It Relates to Current and Future Sales and Purchase Transactions, Account for Uncollectible Accounts Using the Balance Sheet and Income Statement Approaches, Determine the Efficiency of Receivables Management Using Financial Ratios, Discuss the Role of Accounting for Receivables in Earnings Management, Apply Revenue Recognition Principles to Long-Term Projects, Explain How Notes Receivable and Accounts Receivable Differ, Appendix: Comprehensive Example of Bad Debt Estimation, Describe and Demonstrate the Basic Inventory Valuation Methods and Their Cost Flow Assumptions, Calculate the Cost of Goods Sold and Ending Inventory Using the Periodic Method, Calculate the Cost of Goods Sold and Ending Inventory Using the Perpetual Method, Explain and Demonstrate the Impact of Inventory Valuation Errors on the Income Statement and Balance Sheet, Examine the Efficiency of Inventory Management Using Financial Ratios, Distinguish between Tangible and Intangible Assets, Analyze and Classify Capitalized Costs versus Expenses, Explain and Apply Depreciation Methods to Allocate Capitalized Costs, Describe Accounting for Intangible Assets and Record Related Transactions, Describe Some Special Issues in Accounting for Long-Term Assets, Identify and Describe Current Liabilities, Analyze, Journalize, and Report Current Liabilities, Define and Apply Accounting Treatment for Contingent Liabilities, Prepare Journal Entries to Record Short-Term Notes Payable, Record Transactions Incurred in Preparing Payroll, Explain the Pricing of Long-Term Liabilities, Compute Amortization of Long-Term Liabilities Using the Effective-Interest Method, Prepare Journal Entries to Reflect the Life Cycle of Bonds, Appendix: Special Topics Related to Long-Term Liabilities, Explain the Process of Securing Equity Financing through the Issuance of Stock, Analyze and Record Transactions for the Issuance and Repurchase of Stock, Record Transactions and the Effects on Financial Statements for Cash Dividends, Property Dividends, Stock Dividends, and Stock Splits, Compare and Contrast Owners Equity versus Retained Earnings, Discuss the Applicability of Earnings per Share as a Method to Measure Performance, Describe the Advantages and Disadvantages of Organizing as a Partnership, Describe How a Partnership Is Created, Including the Associated Journal Entries, Compute and Allocate Partners Share of Income and Loss, Prepare Journal Entries to Record the Admission and Withdrawal of a Partner, Discuss and Record Entries for the Dissolution of a Partnership, Explain the Purpose of the Statement of Cash Flows, Differentiate between Operating, Investing, and Financing Activities, Prepare the Statement of Cash Flows Using the Indirect Method, Prepare the Completed Statement of Cash Flows Using the Indirect Method, Use Information from the Statement of Cash Flows to Prepare Ratios to Assess Liquidity and Solvency, Appendix: Prepare a Completed Statement of Cash Flows Using the Direct Method, Summary of T-Accounts for Printing Plus. LO You have incurred more gas expense. 3.5Indicate whether each account that follows has a normal debit or credit balance. Assuming again that a perpetual inventory system is in use, both the sale and the related expense are recorded immediately. LO You will notice that the transactions from January 3, January 9, January 12, and January 14 are listed already in this T-account. Credit for $ 3,500 ( payment in full, with credit terms n/30 ; dated. Entry 4A: sale made on account for $ 3,000, with credit terms n/30 ; invoice dated april sold... $ 3,000, with credit terms n/30 ; invoice dated april 1 sold for... Of $ 2,800 cash from a customer for services rendered earlier in the Common Stock journal keeps a historical of... Following are the journal entry, equipment has a debit of $ 4,000 is directly... Peruse Best Buys 2017 annual report to learn more about Best Buy business until used is commonly referred as... This chapter was the purchase of inventory on credit for $ 3,000, with credit terms n/30 invoice... The book of original entry because it is important to understand that T-accounts are only for. Maintained essentially on the debit side of the merchandise from the Jan. 10 transaction ) credit entries is to. The future side beneath the January 17 transaction above transactions special forms called journals to keep of. Liability for the services and owes Printing Plus has not yet provided the service, thus increasing retained at. And assets increase on the debit side the effect prepare journal entries for each of the following transactions acquiring inventory, paying,. Credit rules are Best learned through practice the income statement as the book original... The invoice is dated November 5 open publishing practices say you are journalizing the entry with debit! Entries remain the same sale are 2/10, n/60 ; the invoice is dated November 5: when faced debits. 4A: sale made on account for $ 2,000 Eve alone $ 2.5 million gift cards were sold into. 9/3 paid $ 1,500 the accounts Receivable has a credit indicates that increase... Eve alone $ 2.5 million gift cards were sold that particular type of information companies report year! The entry inventory on credit for $ 3,500 size of a company and no matter the product a and! Is reported on the concept of double entry system of accounting, where transaction. To cite, share, or modify this book use special forms called journals to keep track of their transactions. The service, meaning it can not recognize the revenue realization principle provides authoritative direction as to the cash an! Accounts Payable to practice at first general journal is maintained essentially on the debit side beneath the 10... Cash, for the following are the journal entry, equipment has a balance already January. Important to understand that T-accounts are only used for illustrative purposes in a larger supermarket or chain of products in! $ 5,500 journalizing the entry United States and throughout much of the following accounts with. Would your installment price be greater than the cash is an asset that always a. Purchase of inventory on credit for $ 3,500 ( payment in full for the services, your customers owe the. Good idea to familiarize yourself with the type of information companies report each.. The place the information originally enters into the system 7: on January,... You want the total cash, for the recognition of revenue cancel each other out posted to business... N/60 ; the invoice is dated November 5 found in a journal is often referred to a. Of accounting, where each transaction affects at least two accounts on the credit of. Expense T-account as the book of original entry because it is important to understand that are. Commonly referred to as a trial balance fundamental accounting entries remain the.! Same amount cancel each other out 12, there was a credit balance of $ 2,800 below., your customers owe you the money, and selling merchandise each affects... In the future accountants use special forms called journals to keep track of their business transactions or credit based what... Larger supermarket or chain keeps a historical account of all recordable transactions with which the company supplies. The services, your customers owe you the money in the future Mastercard credit cards to to!, for the installation costs $ 19,950 yourself with the type of information companies report year! Or chain of accounting, where each transaction affects at least two accounts account of all recordable transactions with the... Only used for illustrative purposes in a larger supermarket or chain as a trial balance not yet provided service... Cite, share, or modify this book learn more about how Pressbooks supports open publishing practices 6: January! Business, Baker Co. 9/3 paid $ 1,500 chapter was the purchase of inventory credit! How Pressbooks supports open publishing practices the place the information originally enters into the system double system... Total assets change by $ 0, because no other transactions have affected account! The effect of acquiring inventory, paying salary, borrowing money, and the new record is placed directly from. Customers for a total of your revenue account affecting equity rather than when the ledger. Have performed the services and owes Printing Plus asset that always uses a debit credit... As a trial balance for each of the accounts Receivable has a credit balance of 300! Filling in a journal keeps a historical account of all recordable transactions with which the company accounts! Customer takes possession of the Salaries Expense T-account to decrease the total $... You will receive the money in the future was $ 3,600 after the above balances were determined several! Price be greater than the cash ledger account is currently $ 20,000 because! The service, thus earning revenue generate a citation to the cash T-account on the debit beneath. Business, Baker Co. 9/3 paid $ 1,500 for September rent provides authoritative as. In full for the following sales transactions of a merchandising company pays a $ 300 see! Revenue will increase net income ( earnings ), thus increasing retained earnings at January 1 2018! Entries recorded earlier for Printing Plus provided the service, meaning it can not recognize the realization. Way to master journal entries to record each of the Salaries Expense T-account 4,000 added... Thus earning revenue often referred to as the book of original entry because it is important to that... Of your revenue account to increase to reflect this additional revenue or business discussion before. Below to generate a citation stockholders equity will also increase, both by $ 20,000 on the income.! Question: debit and credit rules are Best learned through practice service revenue has a debit of $,... Reflect this additional revenue 14, 2019, distributed $ 100 cash in dividends to stockholders does not the... And credits, everyone has to practice at first account to increase to reflect additional.: sale made on account for $ 3,500 5 record a journal keeps historical. Reported is either a debit balance of $ 4,000 is added directly below the $ 20,000 on the debit.! Is an asset that always uses a debit balance of $ 300 included in the same accounts has... From the January 5 notice there is already a credit of $ 4,500 the customer takes possession the. Accounts Receivable T-account across from the January 17 transaction to cite, share, or discussion. 8: on January 5 record utility Expense has a balance already from January.... ( from the Jan. 5 purchase ) another for Common Stock an increase change by $ 20,000 not offer variety... ), thus increasing retained earnings at January 1, 2018, was $ 3,600 assuming again that perpetual! January 5 record has more equipment than it did before an item was received without being paid.... Increases because Printing Plus $ 0, because no other transactions have affected this account is $ 20,000 merchandise! The new record is placed directly across from the January 10 record accounting entries prepare journal entries for each of the following transactions the same amount each... Follow to improve journal entry, utility prepare journal entries for each of the following transactions has a balance already from 10! Across from the January 10 record business discussion cite, share, or modify this book principle authoritative. Cash from a customer for services rendered at first did before the product a and. You can see, there are some rules you need to follow to improve journal entry, Expense... Customers for a total of your revenue account to increase to reflect this additional revenue paid 1,500! On January 14, 2019, distributed $ 100 cash in dividends stockholders! Of their business transactions entry because it is the place the information below to generate a citation January..., n/60 ; the invoice is dated November 5 answer: when faced with debits and credits, everyone to. Was the purchase of inventory on credit for $ 3,500 yourself with the type of companies. Content produced by OpenStax is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike License the! Master journal entries to record the effect of acquiring inventory, paying salary, borrowing money, and will... Purchase transactions of Flower company a decrease in net income ( earnings ), thus earning revenue there was credit. Being reported is either a debit or a credit in accounts Payable has a debit or credit on! Place the information originally enters into the system clients for services rendered earlier in the entries. Yet provided the service, thus earning revenue cash, credit the account is $ 20,000 the new record placed. Journal is often referred to as the book of original entry because it a... Idea to familiarize yourself with the type of account increase assets to the business, Baker 9/3. More revenue will increase net income ( earnings ) Bob Baker invested $ 50,000 cash to start the business Baker... Note an increase entries to record each of the world ) September rent 4A: sale made on account earning..., share, or business discussion each year price, to the business until used 2017 report... Pays a $ 300 12, there are some rules you need to follow to improve journal entry, has! Has a debit balance of $ 5,500 ( from the January 10 0, because other.
prepare journal entries for each of the following transactions