![]() The company purchased $20,300 of new office equipment by paying $20,300 cash. The company paid $2,000 cash to settle the account payable created in transaction c. The company paid $635 cash for this month’s utilities. The company provided services to a client and collected $8,000 cash. The company paid $1,800 cash salary to an assistant. The company purchased $5,600 of additional office equipment on credit.į. The automobile has a value of $16,500 and is to be used exclusively in the business.Į. Venedict invested her personal automobile in the company in exchange for more common stock. The company purchased $2,000 of office supplies on credit.ĭ. The purchase is paid with $30,000 cash and a long-term note payable for $170,000.Ĭ. The company purchased land valued at $40,000 and a building valued at $160,000. Venedict invested $60,000 cash along with office equipment valued at $25,000 in exchange for common stock of a new company named HV Consulting.ī. Propose and evaluate two other courses of action you might consider, and explain why.īusiness transactions completed by Hannah Venedict during the month of September are as follows.Ī. You decide to reject her suggestion without the manager’s approval and to confront her on the ethics of her suggestion. The disadvantage is that the assistant manager could steal cash by simply recording less sales than the cash received and then pocketing the excess cash. The advantage to the process proposed by the assistant manager includes improved customer service, fewer delays, and less work for you. She says that, in this way, customers will be happy and the register record will always match the cash amount when the manager arrives at three o’clock. The assistant manager says she will add up cash and enter sales after lunch. Recently, lunch hour traffic has increased and the assistant manager asks you to avoid delays by taking customers’ cash and making change without entering sales. Question: Assume that you are a cashier and your manager requires that you immediately enter each sale when it occurs. In rotation, each member presents his/her expert team’s report to the learning team. Each expert should return to his/her learning team. Using the transaction and amounts in (b), verify the equality of the accounting equation and then explain any effects on the income statement and statement of cash flows.ģ. Expert teams are to draft a report that each expert will present to his or her learning team addressing the following:Ĭ. ![]() Form expert teams of individuals who selected the same component in part 1. Each team member must select one of the six components, and each team must have at least one expert on each component: ( a) assets, ( b) liabilities, ( c) common stock, ( d) dividends, ( e) revenues, and ( f ) expenses.Ģ. Form learning teams of six (or more) members. It can be used to reveal insights into changes in a company’s financial position.ġ. Keeping track of your income accountsįreeAgent is a powerful double-entry accounting engine which can generate reports, including profit and loss, whenever you or your accountant need to take a look.Question: The expanded accounting equation consists of assets, liabilities, common stock, dividends, revenues, and expenses. Income accounts appear on the business's profit and loss account. If you later have to issue a credit note to reduce or cancel that invoice, that would be a debit entry to the income account for sales, because the amount you've earned has reduced. That's a credit entry to the income account for sales. When you issue a sales invoice to a customer, that increases the amount you've earned in sales. for a capital account, you credit to increase it and debit to decrease it.for a liability account you credit to increase it and debit to decrease it.for an asset account, you debit to increase it and credit to decrease it.for an expense account, you debit to increase it, and credit to decrease it.for an income account, you credit to increase it and debit to decrease it.What you do depends on the kind of account you’re dealing with: To increase the amount in your business accounts, you need to debit some accounts and credit others. How debits and credits work for different accounts Capital accounts: what is owed to or by the business owner.Liability accounts: what the business owes.Expense accounts: the business's day-to-day running costs.Income accounts: what the business has earned.In double-entry bookkeeping, there are five types of nominal accounts: Income accounts in double-entry bookkeeping ![]() Income accounts are categories within the business's books that show how much it has earned.Ī debit to an income account reduces the amount the business has earned, and a credit to an income account means it has earned more. What are income accounts? Definition of income accounts
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