Question

In: Accounting

INSTRUCTIONS: Indicate the accounts to be debited and credited in recording the selected transactions described below...

INSTRUCTIONS: Indicate the accounts to be debited and credited in recording the selected transactions described below by inserting the letter designations in the appropriate columns.

ACCOUNTS

A. Accounts Receivable F. Fees Earned K. Rent Revenue O. Supplies Expense

B. Accumulated Depreciation G. Land L. Salaries Expense P. Taxes Expense

C. Advertising Expense H. Prepaid Advertising M. Salaries Payable Q. Taxes Payable

D. Depreciation Expense I. Prepaid Rent N. Supplies R. Unearned Fees

E. Equipment J. Rent Expense

DESCRIPTIONS

Debit

Credit

         0.   Adjust for rent accrued at the end of the period on property rented to others ...................................................................................................................


A


K

   1–2.    Adjust for the cost of supplies used during the period .................................

   3–4.    Adjust for depreciation of equipment for the period ......................................

   5–6. Adjust for salaries accrued at the end of the period .....................................

   7–8.   Adjust for prepaid advertising expired during the period .............................

   9–10.    Adjust for the rent expired for the period ....................................................

13–14.. Adjust for fees collected in advance and now earned .................................

11–12.. Adjust for taxes accrued at the end of the period .........................................

Solutions

Expert Solution

0. Adjust for rent accrued at the end of the period on property rented to others:

A. Accounts Receivable
K. Rent Revenue

When rent is accrued to be received on property rented to others, Accounts Receivable increases and it is debited for the amount to be collected. Rent Revenue also increases and it is credited.

Rule used :
Debit - Increase in asset (Accounts Receivable)
Credit - Increase in revenue (Rent Revenue)

1–2. Adjust for the cost of supplies used during the period:

O. Supplies Expense
N. Supplies

For the cost of supplies used, the Supplies Expense is increased and it is debited. Supplies is reduced from the stock of supplies because of the usage and hence, Supplies is credited.

Rule used :
Debit - Increase in expense (Supplies Expense)
Credit - Decrease in asset (Supplies)

3–4. Adjust for depreciation of equipment for the period:

D. Depreciation Expense
B. Accumulated Depreciation

Depreciation is an expense and it is increased. Therefore, Depreciation Expense is debited and Accumulated Depreciation which is a contra asset entry is increased and it is credited.

Rule used :
Debit - Increase in expense (Depreciation Expense)
Credit - Decrease in asset (Accumulated Depreciation)

5–6. Adjust for salaries accrued at the end of the period:
L. Salaries Expense
M. Salaries Payable

Salaries are accrued to be paid. Therefore, Salaries Expense is increased and it is debited. Salaries Payable is a liability and it is also increased and hence it is credited.

Rule used :
Debit - Increase in expense (Salaries Expense)
Credit - Increase in liability (Salaries Payable)

7–8. Adjust for prepaid advertising expired during the period:

C. Advertising Expense
H. Prepaid Advertising

Advertising Expense is increased and it is debited for the expiry of Prepaid Advertising. Similarly, Prepaid Advertising is reduced because of the expiry and hence, it is credited.

Rule used :
Debit - Increase in expense (Advertising Expense)
Credit - Decrease in asset (Prepaid Advertising)

9–10. Adjust for the rent expired for the period:

J. Rent Expense
I. Prepaid Rent

Rent Expense is increased and it is debited for the expiry of Prepaid Rent. Similarly, Prepaid Rent is reduced because of the expiry and hence, it is credited.

Rule used :
Debit - Increase in expense (Rent Expense)
Credit - Decrease in asset (Prepaid Rent)

13–14.. Adjust for fees collected in advance and now earned:

R. Unearned Fees
F. Fees Earned

Unearned fees was a liability when the fees collected in advance. Now it is earned. Therefore, Unearned Fees is debited for the decrease in liability. Fees is now recorded as earned and Fees Earned is credited.

Rule used :
Debit - Decrease in liability (Unearned Fees)
Credit - Increase in income (Fees Earned)

11–12.. Adjust for taxes accrued at the end of the period:

P. Taxes Expense
Q. Taxes Payable

Taxes accrued means taxes to be paid. Therefore Taxes Expense is an expense and it is debited. Taxes are to be paid and it is a liability. Therefore, Taxes payable is credited.

Rule used :
Debit - Increase in expense (Taxes Expense)
Credit - Increase in liability (Taxes Payable)

ekkarill92 answered 1 year ago
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