FIJI NATIONAL UNIVERSITY ACC501: Computerized Accounting Tutorial: Week 4

DISCUSSION 1-1 Define and describe the 3 types of transaction? 1-2 Illustrate and briefly describe the basic accounting cycle? 1-3 What is a chart of accounts? 1-4 Briefly explain double-entry accounting with an example? 1-5 Debits are bad and credits are good for the business. Dou you agree? Why or why not? EXERCISE 2-1 Transaction Analysis For each of the following transactions, indicate whether the accounts affected are an asset, a liability, equity, an income or an expense. Also indicate whether the accounts are being increased or decreased and whether the increase or decrease is a debit or credit. Example: Paid for advertising Increase an expense [debit], decrease an asset [credit] 1. Owner invested cash. 2. Paid creditor by cheque. 3. Cash payments made for insurance 6 months in advance. 4. Purchased supplies on account. 5. Sold a vehicle for cash. 6. Invoiced a customer for services performed. 7. Owner withdrew from business bank account for private use. 8. Received payment on an account receivable. 9. Issued cheque and took out loan to purchase machinery. 10. Paid for an advertisement aired on television.

2-2 Journal Entries The following transactions occurred in Collins Print Shop. 1. 2. 3. 4. 5. 6. 7. 8. P. Collins, owner, transferred $1700 in cash to the business. Collins hired a new employee at an annual salary of $13 400. The shop completed an order and invoiced the customer $125. The shop purchased a piece of equipment for $9400, paid $1200 by cheque and signed a 1 year, 10% loan payable for the reminder. Collins Print Shop signed an agreement with the secondary school to print 4900 programs for $1290. The business paid $700 to a creditor for paper purchased on credit. The shop paid $600 for rent of the premises. P. Collins withdrew $480 from the business for personal use.

Required: Prepare journal entries for transactions above [1-8]. PROBLEM 3-1 Journal Entries, Ledger and Trial Balance. The 31 may, 2011 trial balance of Joel Tan, Physiotherapist is shown below. Ignore GST. JOEL TAN, PHYSIOTHERAPIST Trial Balance As at 31 May 2007 Account Debit Cash at Bank $9630 Accounts Receivable 4338 Supplies 1116 Prepaid Insurance 738 Furniture and Equipment 23688 Accounts Payable Electricity Account Payable Unearned Revenue J. Tan, Capital J. Tan, Drawings 14652 Services Revenue Salary Expense 15484 Electricity Expense 860 Rent Expense 2124 $72630

Credit

$882 860 264 28624 42000

$72630

The following transactions were completed during June. June 1 Purchased supplies on credit for $523. 3 Received $2 220 from payments on account. 6 Paid the electricity expense of $860, previously recorded. 10 Performed services for $200 that was recorded previously as unearned revenue. 14 Recorded revenue of $16 235 in cash and $1 245 on account. Paid salaries $7 320. 20 Purchased furniture for $1400 and paid by cheque. 23 Paid creditors $640 by cheque. 24 Withdrew $8 000 from the business for personal use. 26 Purchased insurance policy for $420 to cover business assets. 27 Received $1 200 from patients as payment on account. 29 Recorded revenue of $14 360 in cash and $21 000 on credit. 30 Paid rent $2 450. Required: A. Prepare journal entries to record each transaction. B. Post the journal entries to ledger accounts [ Enter the 31 may balances] C. Prepare a trial balance as at 30 June, 2011.

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