Accounting Exercise: Analyzing Financial Transactions & Income Statements

Posted on May 27, 2024 in Mathematics

Review Exercises (page 164)

Using Your Knowledge

Chapter 5

Exercise 1, p. 164

A. Asset debit

B. Asset credit

C. Liability debit

D. Liability credit

E. Capital debit

F. Capital credit

G. Drawings debit

H. Drawings credit

I. Revenue debit

J. Revenue credit

K. Expense debit

L. Expense credit

1. Purchase a new car on account.

2. Receive payment on account from a customer.

3. Owner withdraws cash for personal use.

4. Owner starts a new business by investing cash.

5. The car is repaired and paid for in cash immediately.

6. Perform a service for a customer for cash.

7. Perform a service for a customer on account.

8. Purchase supplies for cash.

9. Receive a bill for gas and oil for the car.

10. Pay a creditor on account.

11. Throw out some ruined supplies.

Dr

Cr

1. A

D

2. A

B

3. G

B

4. A

B

5. K

B

6. A

J

7. A

J

8. A

B

9. K

D

10. C

B

11. K

B

Exercise 2, p. 165

BIANCO COMPANY
INCOME STATEMENT
YEAR ENDED DECEMBER 31, 20–

Revenue

Fees Earned

$47

4

1

6

–

Operating Expenses

Car Expense

$2

4

8

2

–

Rent Expense

3

5

0

0

–

Utilities Expense

1

0

7

5

–

Wages Expense

18

0

7

2

–

Total Expenses

25

1

2

9

–

Net Income

$22

2

8

7

–