Question

QUESTION 3

A manager at Stalemate, a chess business retailing chess boards and providing chess lessons, requires help with interpreting some of the accounting transactions that took place during the month of September 2020. The manager has provided you with a list of those transactions below.

Required:

Underneath each transaction in the space provided, write a brief narration describing the economic event that corresponds to that transaction.

Date	Account titles (Details)	Dr ($)	Cr ($)
2/9/2020	Cash	3,000
	Accounts Receivable	2,500
	GST Collected		500
	Service Revenue		5,000
Answer here:
3/9/2020	Wages Payable	6,500
	Cash		6,500
Answer here:
15/9/2020	Chess boards	10,000
	GST Paid	1,000
	Accounts Payable		5,000
	Cash		5,100
Answer here:
30/9/2020	Accounts Payable	15,000
	Bank Loan		15,000
Answer here:
30/9/2020	Rent Expense	2,000
	Prepaid Rent		2,000
Answer here:
30/9/2020	Unearned Revenue	10,000
	Service Revenue		10,000
Answer here:

Answer 1

Date	Account titles (Details)	Dr ($)	Cr ($)
2/9/2020	Cash	3000
	Accounts Receivable	2500
	GST Collected		500
	Service Revenue		5000
Answer here: Sales on credit and for cash. And Respective amount GST has been collected.
3/9/2020	Wages Payable	6500
	Cash		6500
Answer here: Cash paid for wages that are due in last period.
15/9/2020	Chess boards	10000
	GST Paid	1000
	Accounts Payable		5000
	Cash		5100
Answer here: Inventory purchased on account and Cash and paid related GST.
30/9/2020	Accounts Payable	15000
	Bank Loan		15000
Answer here: Settlement of creditors by taking bank loan.
30/9/2020	Rent Expense	2000
	Prepaid Rent		2000
Answer here: Rent incurred from the cash paid in advance for the rent earlier
30/9/2020	Unearned Revenue	10000
	Service Revenue		10000
Answer here: Services has been performed now for cash received in advance earlier.