EX 2-3 Charts of accounts 

LeadCo School is a newly organized business that teaches people how to inspire and influence others. The list of accounts to be opened in the general ledger is as follows:

 

Accounts Payable          Miscellaneous Expense

                             Accounts Receivable          Prepaid Insurance    

                             Cash                                  Rent Expense

                             Equipment                       Supplies 

                             Fees Earned                     Supplies Expense 

                             Ivy Bishop,                       Capital  Unearned Rent 

                             Ivy Bishop,                       Drawing  Wages Expense

 

List the accounts in the order in wich they should appear in the ledger of LeadCo School and assign account numbers. Each account number is to have two digits: the first digit is to indicate the major classification ( 1 for assets, etc.), and the second digit is to identify the specific account within each major classification (11 for Cash, etc.).

 

Ex 2-4 Rules of debit and credit

 

The following table summarizes the rules of debit and credit. For each of the items (a) through (1), indicate wheter the proper answer is a debit or a credit. 

         

 

                                                                     Increase   Decrease     Normal Balanced

 

Balance sheet accounts:

Asset                                                               (a)               (b)                 Debit

Liability                                                             ©             Debit                 (d)

Owner's equity:

Capital                                                         Credit             (e)                      (f)  

Drawing                                                            (g)               (h)                    (i)

Income statement accounts:

Revenue                                                             (j)               (k)                 Credit

Expense                                                              (l)           Credit               Debit