Asset Accounts

To
No. Account Title Description/Explanation of Account
Increase

Checking account balance (as shown

in company records), currency, coins,
1010 Cash Debit
checks received from customers but
not yet deposited.

Amounts owed to the company for

Accounts
1011 Debit services performed or products sold
Receivable
but not yet paid for.

Merchandise Cost of merchandise purchased but

140 Debit
Inventory has not yet been sold.

Cost of supplies that have not yet

been used. Supplies that have been
150 Supplies Debit
used are recorded in Supplies
Expense.

Cost of insurance that is paid in

160 Prepaid Insurance Debit advance and includes a future
accounting period.

Cost to acquire and prepare land for

170 Land Debit
use by the company.

Cost to purchase or construct

175 Buildings Debit
buildings for use by the company.

Amount of the buildings' cost that has

Accumulated
been allocated to Depreciation
178 Depreciation - Credit
Expense since the time the building
Buildings
was acquired.

Cost to acquire and prepare

180 Equipment Debit
equipment for use by the company.

Amount of equipment's cost that has

Accumulated
been allocated to Depreciation
188 Depreciation - Credit
Expense since the time the equipment
Equipment
was acquired.
Liability Accounts
To
No. Account Title Description/Explanation of Account
Increase

The amount of principal due on a formal

21
Notes Payable Credit written promise to pay. Loans from
0
banks are included in this account.

Amount owed to suppliers who provided

21 goods and services to the company but
Accounts Payable Credit
5 did not require immediate payment in
cash.
22 Amount owed to employees for hours
Wages Payable Credit
0 worked but not yet paid.

Amount owed for interest on Notes

Payable up until the date of the balance
23 sheet. This is computed by multiplying
Interest Payable Credit
0 the amount of the note times
theeffective interest rate times the time
period.

Amounts received in advance of

delivering goods or providing services.
24 Unearned
Credit When the goods are delivered or
0 Revenues
services are provided, this liability
amount decreases.

25 Mortgage Loan A formal loan that involves a lien on real

Credit
0 Payable estate until the loan is repaid.

Owner's Equity Accounts

To
No. Account Title Description/Explanation of Account
Increase

Amount the owner invested in the

29 Mary Smith, company (through cash or other assets)
Credit
0 Capital plus earnings of the company not
withdrawn by the owner.
 Amount that the owner of the sole
proprietorship has withdrawn for personal
29 Mary Smith, use during the current accounting year.
Debit
5 Drawing At the end of the year, the amount in this
account will be transferred into Mary
Smith, Capital (account 290).

Operating Revenue Accounts

To
No. Account Title Description/Explanation of Account
Increase
Amounts earned from providing services
to clients, either for cash or on credit.
When a service is provided on credit,
31
Service Revenues Credit both this account and Accounts
0
Receivable will increase. When a service
is provided for immediate cash, both this
account and Cash will increase.

Operating Expense Accounts

To
No. Account Title Description/Explanation of Account
Increase

Expenses incurred for the work

performed by salaried employees
50 during the accounting period. These
Salaries Expense Debit
0 employees normally receive a fixed
amount on a weekly, monthly, or
annual basis.

Expenses incurred for the work

performed by non-salaried employees
51
Wages Expense Debit during the accounting period. These
0
employees receive an hourly rate of
pay.

54 Supplies Expense Debit Cost of supplies used up during the

 0 accounting period.

56 Cost of occupying rented facilities

Rent Expense Debit
0 during the accounting period.

Costs for electricity, heat, water, and

57
Utilities Expense Debit sewer that were used during the
0
accounting period.

57 Cost of telephone used during the

Telephone Expense Debit
6 current accounting period.

Costs incurred by the company during

61 Advertising the accounting period for ads,
Debit
0 Expense promotions, and other selling and
expenses (other than salaries).

Cost of long-term assets allocated to

75 Depreciation
Debit expense during the current accounting
0 Expense
period.

Non-Operating Revenues and Expenses, Gains, and Losses

To
No. Account Title Description/Explanation of Account
Increase

Interest and dividends earned on bank

accounts, investments or notes
81 receivable. This account is increased
Interest Revenues Credit
0 when the interest is earned and either
Cash or Interest Receivable is also
increased.

Occurs when the company sells one of

91 Gain on Sale of
Credit its assets (other than inventory) for more
0 Assets
than the asset's book value.

Occurs when the company sells one of

96 Loss on Sale of
Debit its assets (other than inventory) for less
0 Assets
than the asset's book value.