ACCT 200 1st Edition Lecture 5Outline of Last Lecture I. Important Things About Debits and CreditsII. ExampleOutline of Current Lecture I. Review II. T-AccountsIII. Trial BalanceIV. Exercise 2-3V. Brief Exercise 3-1Current LectureAcct receivable means you will get cash, acct payable means you will need to payService revenue/revenue/fees revenue means you have earned the moneyUnearned revenues means you collected the money before you provided the customer with the good/service: unearned revenues are liabilities, which have a credit balanceCommon stock can never be debitedKnow difference between rent expense (paying off a liability; paying rent for the past month) and prepaid rent (asset)Buying equipment – debit Selling equipment – credit T-Accounts for General Journal from last class (debits on left, credits on right) Cash Supplies Office Furniture 20,000 100 1950 4000500 25003900 200400900 2000 18,300Total balance (debit)Common Stock Acct Payable Unearned Rev. 20,000 900 1950 500 1500 2550Total balance (credit) Revenue/Fees Utilities Exp. Salaries Exp. 3900 400 2000 Advertising Exp. Computer Rent Exp. 200 100Trial BalanceDebit CreditCash 18,300Supplies 1950Office Furniture 4000Acct Payable 2550Unearned Rev. 500Common Stock 20,000Revenues/Fees Earned 3900Utilities Exp. 400Salaries Exp. 2000Advertising Exp. 200Computer Rent Exp. 100 TOTALS 26,950 26,950Debits = Credits*each account can only have a debit or credit balance*normal balance is whatever increases the accountExercise 2-3 Journal EntryDebit Credit1/1/11 Issued 10,000 shares common stock for $32,000 cashCash 32,000Common Stock 32,0001/1/11 Purchased land for $19,000 using note payableLand 19,000Notes Payable 19,0001/1/11 Receive $12,000 cash for rental fees earned during the monthCash 12,000Rental fees/revenues 12,0001/1/11 Provided rental service for customer and billed on accountAcct receivable 100Rental fees/revenues 1001/1/11 Buy supplies on account for $500Supplies 500Acct payable 500Brief Exercise 3-1a. Cash – debit Unearned revenue – credit b. Acct receivable – debit Revenue – credit c. Cash – debit Revenue –
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