Exercise:
Indicate whether each of the following items below is an asset, liability, revenue, expense, gain or loss account and whether it appears in the balance sheet or income statement.
a) Office furniture
b) Income from services
c) Salaries paid to workers
d) Supplies on hand
e) Salary payable to workers
f) Cash
g) Income form sale of a used truck
h) Goods damaged by fire in the store
Given below is a list of selected transactions performed by John Décor during the month of September 2002, the first month of operation.
a) Record the transactions in General Journal
b) Post each entry to the perspective account. Use the four column account.
c) Prepare a trial balance
d) Prepare a worksheet. Assume the following adjustment for the accounts and journalize them.
e) Prepare a Balance sheet, Income statement and statement of owners equity
f) close the temporary accounts.
Sept. 10 Mr. John transferred cash form his personal account to be used in the business,
Birr 10,000.
10 Paid rent for the month, Birr 500
11 Purchased a truck for Birr 12,000 by paying Birr 3,000 Cash and giving a notes payable for the difference.
12 Purchased equipment on account Birr 1,460.
13 Purchased supplies on account Birr 240.
14 Paid insurance premiums of Birr 170 (Dr. prepaid insurance)
15 Received cash for services completed Birr 360.
16 Purchased Supplies on account Birr 240.
18 Paid salaries of Birr 900.
21 Paid its liabilities for the purchase of equipment
24 Recorded sales on account Birr 2,080
26 Received an invoice for truck expense Birr 115
27 Paid utilities expense Birr 205.
27 Paid miscellaneous expenses Birr 73.
28 Received cash from customers on account birr 1,420
30 Paid salaries to employees Birr 950
30. The owner withdrew Birr 1, 750 for personal use.
The trial balance of Betty Beauty Saloon does not balance. The errors in the accounting work are given below. Determine the correct balance of each account and prepare the corrected trial balance.
a) Office furniture - Asset, Balance sheet
b) Income from services - Revenue, Income statement
c) Salaries paid to workers - Expense, Income statement
d) Supplies on hand - Asset, Balance sheet
e) Salary payable to workers - Liability, Balance sheet
f) Cash - Asset, Balance sheet
g) Income from sale of a used truck - Gain, Income statement
h) Goods damaged by fire in the store - Loss, Income statement
Without the list of accounts and their original balances, it is not possible to determine the correct balance of each account and prepare the corrected trial balance for Betty Beauty Salon.