Explore BrainMass

Explore BrainMass

    Classify by type of account and effects

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    See Attached file.

    Selected transactions for H Burns, Inc, an interior decorating firm, in its first month of business are as follows:

    Jan 2 Invested $15,000 cash in business in exchange for common stock.
    3 Purchased used car fro $4,000 cash for use in business.
    9 Purchased supplies on account for $500.
    11 Billed customers $1,800 for services performed.
    16 Paid $200 cash for advertising.
    20 Received $700 cash from customers billed on Jan 11.
    23 Paid creditor $300 cash on balance owed.
    28 Declared and paid a $1,000 cash dividend.

    Instructions:

    For each transaction indicate the following:

    a. The basic type of account debited and credited (asset, liability, stockholders' equity).
    b. The specific account debited and credited (cash, rent expense, service revenue, etc.
    c. Whether the specific account is increased or decreased.
    d. The normal balance of the specific account.

    Use the following format, in which the Jan 2 transaction is given as an example:

    Account Debited Account Credited
    (a) (b) (c) (d) (a) (b) (c) (d)
    Basic specific normal specific normal
    Date Type Account Effect balance basic type account Effect balance
    Jan. Asset Cash increase debit stockholders' common increase credit
    2 equity stock

    © BrainMass Inc. brainmass.com June 3, 2020, 9:38 pm ad1c9bdddf
    https://brainmass.com/business/accounting/classify-type-account-effects-192405

    Attachments

    Solution Preview

    Please see the attached file

    Selected transactions for H Burns, Inc, an interior decorating firm, in its first month of business are as follows:

    Jan 2 Invested $15,000 cash in business in exchange for common stock.
    3 Purchased used car fro $4,000 cash for use in business.
    9 Purchased supplies on account for $500.
    11 Billed customers $1,800 for services performed.
    16 Paid $200 cash for advertising.
    20 Received $700 cash from customers billed on Jan 11.
    23 Paid creditor $300 cash on balance owed.
    28 Declared and paid a ...

    Solution Summary

    The solution explains the effect of transactions on accounts

    $2.19

    ADVERTISEMENT