Fall 2018-BUS2101-Chapter 2 Homeworks All Questions lexcept Ouestion !) should b
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Fall 2018-BUS2101-Chapter 2 Homeworks All Questions lexcept Ouestion !) should be done in color Journal entries do not need explanations aged to use journal paper for journal entries and trial balances Homework should always be hand-written (do not type) Question 1) The terms debit and credit mean "increase" and "decrease," respectively. Do you agree? Explain your answer. Question 2) For each of the following, indicate 1) the classification (asset, liability, owner's equity revenue, or expense), 2) the financial statement it appears on (income statement, statement of retained earnings, or balance sheet), and 3) its normal balance (debit or credit). (a) Unearned Revenue (b) Accounts Payable (c) Prepaid Expense (d) Accumulated Depreciation (e) Service Revenue (f) Cost of Goods Sold (g) Dividends (h) Supplies Question 3) An inexperienced owner prepared the following trial balance that does not balance. Prepare a correct trial balance (in correct form/order) assuming all accounts balances are normal. W. Karim Company Trial Balance September 30, 2018 Debit Credit $26,400 Service Revenue Dividends Cash $ 1,100 5,000 20,800 10,900 14,600 9,400 1,800 79,750 Ren Unearned Service Revenue Accounts Pavablc 2,500 11.700 81,450 aid R ahinas li66003.0 Rent Expense 2,600Explanation / Answer
Q1. Debit does not always mean increase and credit does not always mean decrease. The decrease in liabilities will be debited to the liabilities account. An increase in liabilities will get credited to the liabilities account. Q2. Accounts Classification Fin. Statement Normal balance Unearned revennue Liability Balance Sheet Credit Accounts payable Liability Balance Sheet Credit Prepaid expenses Assets Balance Sheet Debit Accumulated depreciation Liability Balance Sheet Credit Service revenue Revenue Income Statement Credit Cost of goods sold Expenses Income Statement Debit Dividends Owner Equity Statement of RE Debit Supplies Assets Balance Sheet Debit Q3. Trial Balance Debit $ Credit $ Service revenue 26,400 Supplies 1,100 Dividends 5,000 Cash 20,800 Rent revenue 10900 Salaries expenses 14,600 Accumulated dep 9400 Unearned service revenue 1800 Building 79750 Accounts payable 2500 Inventory 11700 Common Stock 81450 Prepaid rent 3500 Retained earnings 6600 Rent expenses 2600 TOTAL 139050 139050
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