Discussion Questions - In chapter, we are introduced to double-entry accounting where all changes in account balances are impacted with either a debit or a credit.
What is a T-Account? On which side is the debit and on which side is the credit? Does this hold true under all circumstances?
The book touches up on "source documents" which are used as documents to support journal entries made in the Accounting system? Provide examples of different types of source documents that a business might use.
Newman company made a purchase of office supplies "on account". How will this transaction impact Newman's accounting equation? Be sure to specify both sides of the accounting equation!
- Newman production services has the following transactions for the year: Beginning cash balance of $45,000
- Accounts receivable arising from credit sales of $45,000
- Cash collections on credit sales of $30,000
- Utility bill received but not yet paid of $5,000
- Owner investment of $7,500
- Owner withdrawal of $6,500
- Cash sales amounting to $12,000
What is the ending cash balance as a result of the you recording all of the above transactions?