nder a double-entry system, show how the entry in each statement is entered in t

Question

nder a double-entry system, show how the entry in each statement is entered in the ledger by using debit or credit to indicate the increase or decrease in the affected account. 1. an increase in Salaries & wages expense...... 2. a decrease in Accounts payable........ 3. an increase in Prepaid insurance...... 4. an increase in Owner's Capital .......5. a decrease in Office supplies...... 6. an increase in Owner's draw....... 7. an increase in Service revenue....... 8. a decrease in Accounts receivable...... 9. an increase in Rent expense......... 10. a decrease in Store equipment

Explanation / Answer

1. an increase in Salaries & wages expense......

Profit & loss A/c Dr.

To Salaries & Wages A/c

2. a decrease in Accounts payable........

Account Payable A/c Dr.

To Cash/ Bank A/c

3. an increase in Prepaid insurance......

Prepaid Insurance A/c Dr.

To Cash/ Bank

Prepaid Insurance goes to balance sheet under current assest in Assest side.

4. an increase in Owner's Capital .......

Bank/ cash A/c Dr.

To Owner Capital A/c

5. a decrease in Office supplies......

Office Supplies A/c Dr.

To Profit & loss A/c

6. an increase in Owner's draw.......

Owner Drawing A/c(under capital A/c in Balance sheet) Dr.

To Cash/Bank A/c

7. an increase in Service revenue.......

Cash /Bank A/c Dr.

To Revenue A/c

8. a decrease in Accounts receivable......

Cash/bank A/c Dr.

To Account Receivable

9. an increase in Rent expense.........

Profit & loss A/c Dr.

To Rent A/c

10. a decrease in Store equipment

In the case of depreciation

Depreciation A/c Dr.

To Store Equipment

In case of Sale of Store equipment

Cash/bank A/c Dr.

To Store Equipment

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