137. Vicki Lake is a computer consultant. Shown below are (a) several accounts in her ledger with each account preceded by an identification number, and (b) several transactions completed by Lake. Indicate the accounts debited and credited when recording each transaction by placing the proper account identification numbers to the right of each transaction.
1.
Accounts Payable
7.
Telephone Expense
2.
Accounts Receivable
8.
Unearned Consulting Fees
3.
Cash
9.
Vicki Lake, Capital
4.
Consulting Fees Earned
10.
Vicki Lake, Withdrawals
5.
Office Supplies
11.
Insurance Expense
6.
Office Supplies Expense
12.
Prepaid Insurance
Debit
Credit
Example:
2
4
Completed consulting work for a client who will pay at a later date.
A.
Received cash in advance from a customer for designing a software package.
B.
Purchased office supplies on credit.
C.
Paid for the supplies purchased in B
D.
Received the telephone bill of the business and immediately paid it.
E.
Paid for a 3-year insurance policy
138. David Roberts is a real estate appraiser. Shown below are (a) several accounts in his ledger with each account preceded by an identification number, and (b) several transactions completed by Roberts. Indicate the accounts debited and credited when recording each transaction by placing the proper account identification numbers to the right of each transaction.
1. Accounts Payable 8. Office Supplies Expense
2.Accounts Receivable 9. Prepaid Insurance
3.Appraisal Fees Earned 10. Salaries Expense
4.Cash 11. Telephone Expense
5.Insurance Expense 12. Unearned Appraisal Fees
6.Office Equipment 13. David Roberts, Capital
7. Office Supplies 14.David Roberts, Withdrawals
Debit
Credit
Example:
Completed an appraisal for a client who promised to pay at a later date.
2
3
A.
Received cash in advance for appraising an office building .
B.
Purchased office supplies on credit
C.
David Roberts used cash from the business to pay his home telephone bill. There were no business calls on the bill .
D.
Received the telephone bill of the business and immediately paid it .
E.
Paid the salary of the office assistant .
F.
Paid for the supplies purchased
in transaction B
..
G.
Completed an appraisal for a client and immediately collected cash for the work done
Short Answer Questions
139. List the steps in processing transactions.
140. Describe source documents and their purpose.
141. Explain how accounts are used in recording information about transactions.
