Preparing Journal Entries of Debits and Credits
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What are the debits and credit accounts for each transaction.
Part 1
Bought pots from Sam on credit .........Show in the form of journal entries.
Received cash from sales
Paid wages with cash
Bought building with a bank loan
part 2
The Dr and Cr have been done. You need to interpret the transaction...ie paid salary with cash etc.
DR Loan $5000
CR Cash $5000
Dr XYZ Store $1000
Cr Sale of Mugs $1000
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Solution Summary
The expert prepares journal entries of debits and credits.
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Complete answers to all of your questions are produced in the following.
It is also provided in a separate word document attached with this response in which the tables are easier to read.
PRINCIPLES OF DOUBLE ENTRY BOOK KEEPING. (Debit and Credit)
1 Transactions: They are the economic events of the enterprise that are recorded.
For example purchased supplies for cash, issued common stock for cash, paid cash to creditors or purchased office equipment for cash etc
The Basic equation of accounting is as under.
Assets = Liabilities + Owners equity.
When a transaction takes place the equality of the basic accounting equation must be preserved e.g. increase in assets has the effect of decrease in another asset or increase in liabilities or increase in owner equity.
Two aspects of transactions: There are two aspects of each transaction, Receiving aspect and giving aspect. When a transaction takes place something is received in exchange of which something is given. For example, when supplies are purchased for cash. There is addition in supplies .It represents receiving aspect and at the same time Cash balance is reduced which represents giving aspect
Table showing the effect of a transaction on two ...
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