The Scenario: The owner opens a business by investing cash. Analysis: The business receives an asset (Cash) and the owner gains equity (Capital).
| Date | Account Titles & Explanation | Debit | Credit | | :--- | :--- | :--- | :--- | | Aug 1 | Cash | 5,000 | | | | Owner's Capital | | 5,000 | | Investment by owner | | | | | Aug 3 | Equipment | 1,200 | | | | Accounts Payable – Vendor Co. | | 1,200 | | Purchased mower on account | | | | | Aug 10 | Accounts Receivable – Client X | 800 | | | | Service Revenue | | 800 | | Billed client for services | | | | | Aug 15 | Rent Expense | 500 | | | | Cash | | 500 | | Paid monthly rent | | | |
Common Mistakes Here: Forgetting to indent the credit accounts, misplacing the dollar amount in the wrong column, or using "Cash" as a credit without a corresponding debit. reinforcement activity 1 part a p 153 answer key full
The Scenario: The business performs a service for a customer and receives immediate payment. Analysis: Cash increases; Revenue (Income) increases.
The search volume for this specific phrase is high for three reasons: The Scenario: The owner opens a business by investing cash
Having the full answer key allows you to reverse-engineer your mistakes. However, a word of caution: using the key to copy answers without understanding will guarantee failure on the exam that follows.
The Scenario: The business writes a check for supplies to be used immediately (or in the near future). Analysis: Supplies (Asset) increase; Cash (Asset) decreases. | Date | Account Titles & Explanation |
Below is a representation of what your General Journal on page 153 should look like if using the standard Century 21 dataset for "Green Landscaping" (or similar generic names).
| Date | Account Title | Doc. No. | Post. Ref. | Debit | Credit | | :--- | :--- | :--- | :--- | :--- | :--- | | Jan 1 | Cash | R1 | | 5,000.00 | | | | Jon Green, Capital | | | | 5,000.00 | | | Received cash from owner as an investment. | | | | | | Jan 2 | Supplies | C1 | | 150.00 | | | | Cash | | | | 150.00 | | | Paid cash for supplies. | | | | | | Jan 3 | Prepaid Insurance | C2 | | 600.00 | | | | Cash | | | | 600.00 | | | Paid cash for insurance policy. | | | | | | Jan 5 | Accounts Receivable—Smith Co. | I1 | | 250.00 | | | | Fees Income | | | | 250.00 | | | Performed services on account. | | | | | | Jan 10 | Accounts Payable—Gear Co. | C3 | | 400.00 | | | | Cash | | | | 400.00 | | | Paid cash on account to creditor. | | | | |