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Chapter 2: 2TI (page 64)

For each account, identify if the change would be recorded as a debit (DR) or credit (CR).

11. Increase to Cash 16. Increase to Interest Revenue

12. Decrease to Accounts Payable 17. Increase to Rent Expense

13. Increase to Common Stock 18. Decrease to Office Supplies

14. Increase to Unearned Revenue 19. Increase to Prepaid Rent

15. Decrease to Accounts Receivable 20. Increase to Notes Payable

Short Answer

Expert verified

Answer

Common stock represents the ownership of the company and transactions are identified as debit or credit.

Step by step solution

01

Definition of Common Stock

The common stock is defined as the stocks or shares which represent the ownership of the company with voting rights.

02

Identification of recording the change

Transaction

Debit (dr) or Credit (cr)

11 Increase to Cash

Debit (dr)

12 Decrease to Accounts Payable

Debit (dr)

13 Increase to Common Stock

Credit (cr)

14 Increase to Unearned Revenue

Credit (cr)

15 Decrease to Accounts Receivable

Credit (cr)

16 Increase to Interest Revenue

Credit (cr)

17 Increase to Rent Expense

Debit (dr)

18 Decrease to Office Supplies

Credit (cr)

19 Increase to Prepaid Rent

Debit (dr)

20 Increase to Notes Payable

Credit (cr)

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Most popular questions from this chapter

If total debits equal total credits on the trial balance, is the trial balance error-free? Explain your answer.

Better Days Ahead, a charitable organization, has a standing agreement with First National Bank. The agreement allows Better Days Ahead to overdraw its cash balance at the bank when donations are running low. In the past, Better Days Ahead managed funds wisely and rarely used this privilege. Jacob Henson has recently become the president of Better Days Ahead. To expand operations, Henson acquired office equipment and spent large amounts on fundraising. During Henson鈥檚 presidency, Better Days Ahead has maintained a negative bank balance of approximately $10,000.

What is the ethical issue in this situation, if any?

State why you approve or disapprove of Henson鈥檚 management of Better Days Ahead鈥檚 funds.

Identifying increases and decreases in accounts and normal balances Insert the missing information into the accounting equation. Signify increases as Incr. and decreases as Decr.

(a) ASSETS Retained Earnings Common Stock (d) Revenues Expenses Contributed Capital (g) (p) (h) Credit (k) Debit (l) Credit (i) (q) (j) Credit Incr. (r) (m) Credit Decr. (o) (f) Credit (c) LIABILITIES (b)

Question:The following transactions occurred for Lawrence Engineering:

Jul. 2 Received \(14,000 contribution from Brett Lawrence in exchange for common stock.

4 Paid utilities expense of \)370.

5 Purchased equipment on account, \(1,600.

10 Performed services for a client on account, \)2,900.

12 Borrowed \(7,100 cash, signing a notes payable.

19 Cash dividends of \)200 were paid to stockholders.

21 Purchased office supplies for $840 and paid cash.

27 Paid the liability from July 5.

Requirements 1. Open the following T-accounts for Lawrence Engineering: Cash; Accounts Receivable; Office Supplies; Equipment; Accounts Payable; Notes Payable; Common Stock; Dividends; Service Revenue; and Utilities Expense.

Consider the following accounts and identify each as an asset (A), liability (L), or equity (E). 1. Rent Expense 6. Accounts Payable 2. Common Stock 7. Unearned Revenue 3. Furniture 8. Notes Receivable 4. Service Revenue 9. Dividends 5. Prepaid Insurance 10. Insurance Expense
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