Chapter 2 ANALYZING AND RECORDING TRANSACTIONS

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.