ACCOUNTING REVIEW EXERCISE (Note: Assets = Liabilities + Owner’s Equity, where Ending

Owner’s Equity = Initial Owner’s Equity + Contributions + Revenues -Expenses - Drawings)

(Note: Debits increase Assets, Expenses and Owner’s Drawings; Credits increase Liabilities,
Owner’s Equity and Revenues)

Entries TRANSACTION ACCOUNTS INCREASE / DEBIT / AMOUNT

AFFECTED DECREASE CREDIT
AND TYPE OF
ACCOUNT
Jan 1, 2012 Owner invests $10,000 Cash Account Increase Asset Debit $10,000
(example:) into her own business Owner’s Equity Account Credit $10,000
from personal savings and Increase Equity
deposits the money into Account
the company bank account
Jan 4, 2012 Company purchases Computer Increase Asset Debit $2,000
computer equipment - Account Account Credit $2,000
$2000 - cheque Cash Account Decrease Asset
Account
Jan 6, 2012 Company pays rent $950 _Rent Expense Increase Debit $950
by cheque _Cash Account Expense Credit $950
Account
Decrease Asset
Account
Jan 7, 2012 Purchase of store _Inventory Increase Asset Debit $1,200
inventory for $1200 on Account Account _ Credit $1,200
credit Accounts Increase
Payable_ Liability
Account
Jan 8, 2012 Purchase of used vehicle _Vehicle Increase Asset Debit $12,000
for $12,000, putting Account_ Account Credit $4,000
$4,000 down and taking a _Cash Decrease Asset Credit $8,000
bank loan for the Account___ Account
remainder Bank Increase
Loan_____ Liability
Account
Jan 10, Paid $500 against bank _Bank Decrease Debit $500
2012 loan Loan________ Liability Credit $500
__Cash Account
Account_____ Decrease Asset
Account__
Jan 12, Owner takes $1,200 from _Owner’s Draw Increase Contra- Debit $1,200
2012 business account for Account_ Equity Account Credit $1,200
personal use __Cash Decrease Asset
Account_____ Account
DATE TRANSACTION ACCOUNTS INCREASE / DEBIT / AMOUNT
AFFECTED DECREASE CREDIT
AND TYPE OF
ACCOUNT
Jan 13, Cash sales to date are __Cash Increase Asset Debit $1,500
2012 $1,500 Account_____ Account Credit $1,500
Sales Increase
Revenue____ Revenue
Account
Jan 14, Credit sales to date are Accounts _Increase Asset Debit $1,400
2012 $1,400 Receivable Account Credit $1,400
__Sales _Increase
Revenue__ Revenue
Account
Jan 16, A Customer pays down __Cash _Increase Asset Debit $300
2012 their account $300 Account__ Account__ Credit $300
_Accounts _Decrease Asset
Receivable Account__
Jan 17, A sales staff member pays _Fuel _Increase Debit $120
2012 for fuel for the company Expense___ Expense Credit $120
vehicle - $120, on account _Accounts Account_
Payable _Increase
Liability
Account_
Jan 18, A utility bill is received __Utility _Increase Debit $130
2012 for $130, and entered into Expense__ Expense Credit $130
the accounts __Accounts Account_
Payable_ _Increase
Liability
Account_
Jan 19, A marketing expense is _Marketing _Increase Debit $180
2012 paid in cash - $180 Expense_ Expense Credit $180
__Cash Account_
Account___ _Decrease Asset
Account__
Jan 20, A contractor is paid for _Repairs _Increase Debit $250
2012 repairing the ceiling - Expense__ Expense Credit $250
$250 __Cash Account_
Account___ _Decrease Asset
Account__
Jan 21, Furniture is purchased for _Furniture _Increase Asset Debit $2,500
2012 $2500 - $400 is paid cash; Account__ Account__ Credit $400
the rest is on account __Cash _Decrease Asset Credit
Account_____ Account__
__Accounts _Increase
Payable__ Liability
Account_