WK 1 5 Account Cycle Full Cycle PDF

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LEVEL 1 ACCOUNT BALANCES Activity 2.a - The Four Items that Affect Equity

Drag the items that affect equity into the expanded accounting equation, beginning with capital. Then, identify whether the item increases, '+', or decreases, '-'minus, equity. View drag and drop keyboard instructions Assets = Liabilities+ Owner Capital-Owner Withdraw+ Revenue – Expenses

Activity 3.a - Classify the Accounts

Classify which part of the expanded accounting equation each account title belongs to by dragging the account into the correct bucket. View drag and drop keyboard instructions Asset, Cash Accounts Receivable Office Supplies Furniture Notes Receivable Office Furniture Liability, Utilities Payable Accounts Payable Interest Payable Salaries Payable Rent Payable Owner, Capital, Owner, Capital Owner, Withdrawals, Owner, Withdrawals

Revenue, Service Revenue Interest Revenue Expense, Interest Expense Advertising Expense Supplies Expense

Activity 3.b - More Practice with Classifying Accounts

Fill in the blanks with the category of the expanded accounting equation (assets; liabilities; owner, capital; owner, withdrawals; revenues; expenses). Do not abbreviate any answers. Prepaid Rent

Owner, Capital Assets

Owner Capital

Owner, Withdrawals

Salaries (and Wages) Expense Owner Withdrawa

Accounts Payable

Expense

Interest Revenue Liabilities

Rent Expense

Revenue

Salaries (and Wages) Payable Expense

Liabilities

Activity 4.a - Balance the Expanded Accounting Equation

Enter the missing value to balance the equation. Assets = Liabilities + Owner, Capital – Owner, Withdrawals + Revenues - Expenses

= 42,000 + 34,000 - 11,000 + 48,000 - 44,000 69,000

50,000 =

+ 27,000 - 3,000 + 7,000 - 11,000 30,000

12,000 = 17,000 +

- 29,000 + 40,000 - 49,000 33,000

Activity 4.b - Using the Expanded Accounting Equation

Using the expanded accounting equation, calculate and enter the answers for each question. You will need to use the answers you calculate for beginning and ending equity to answer the rest of the questions. Assets

Liabilities

Beginning of Year:

$25,000

$18,000

End of Year:

$64,000

$26,000

1) What is the equity at the beginning of the year? To figure we do 25,000-18,000 =

Beginning Equity 7,0000

2) What is the equity at the end of the year? To figure we do 64,000-26,000= 39,000

Ending Equity 39,000

3) If the owner contributes $8,600 and the owner withdraws $39,600, how much is net income (loss)? First find the beginning and ending assets which is 39,000 and beginning and ending liabilities which is 8,000

Then use Assets = Liabilities + Owner, Capital – Owner, Withdrawals + Net Income to solve which is 39,000= 8,000+8,600-39,600+62,000 = 39,000

Net Income (Loss) 62,000

4) If net income is $2,000 and owner withdrawals are $9,400, how much did the owner contribute (owner, capital)?

Assets = Liabilities + Owner, Capital – Owner, Withdrawals + Net Income

39,000=8000+38,400-9,400+2000=

Owner, Capital 38,400

5) If the owner contributes $15,400 and net income is $18,400, how much did the owner withdraw (owner, withdrawals)? Assets = Liabilities + Owner, Capital – Owner, Withdrawals + Net Income 39,000=8000+15400-2800+18400= Owner, Withdrawals 2,800

6) If the owner contributes $44,200 and the owner withdraws $3,300, how much is net income (loss)? Assets = Liabilities + Owner, Capital – Owner, Withdrawals + Net Income 39,000=8,000+44,200-3,300-9,900=39,000 Net Income (Loss) = (9,900)

Activity 5.a - Identifying the Normal Balance

Identify the normal balance for each account by selecting Debit (DR) or Credit (CR) Assets = DR Liabilities = CR Owner, Capital = CR Owner, Withdrawals = DR Revenue =CR Expenses = DR

Activity 5.b - More Practice with Normal Balances

Identify the normal balance for each account by selecting Debit (DR) or Credit (CR). Office Furniture = DR Owner, Capital = CR Owner, Withdrawals = DR Advertising Expense = DR Salaries (and Wages) Payable =CR Service Revenue = CR

LEVEL 2 Analyze and Journalize Transactions Activity 1.a - Identify the Source Documents

Select the type of source document being used/produced from the drop-down menu. Select the type of source document being used/produced from the drop-down menu. 

Company information



Vendor name



Vendor address



Shipping information



Terms of payment



Item(s) ordering and dollar amount(s)

Purchase invoice/order



Company information



Customer name



Customer address



Shipping information



Terms of payment



Item(s) requested and dollar amount(s)

Sales invoice/receipt



Date



Account number



Sign if receiving cash



Cash and coin



Endorsed check amounts



Total

Bank Deposit Slip



Date



Payee



Amount in numbers



Amount in words



Memo line



Signature



Routing number including account number Answer: Bank check/check

Step 2: Analyze the Transactions Activity 2.a - Analyze the Transactions

Review the transactions and determine the accounts, the account types (use assets; liabilities; owner, capital; owner, withdrawals; revenue; and expenses), if they increase/decrease and if they are DR/CR. List accounts in order they would be in the journal entry. Refer to the Chart of Accounts for account titles. Paid cash for rent.

Account #1

Account Type Rent Expense

expense

correct

correct

Account #2

Account Type Cash

correct

asset

correct

Increase/Decrease correc

Debit/Credit cor

Increase

Debit

t

ct

Increase/Decrease correc

Debit/Credit cor

Decrease

Credit

t

ct

Increase/Decrease correc

Debit/Credit

Purchased equipment on account

Account #1

Account Type Equipment

asset

cor

Increase

Debit

correct

correct

t

ct

Account #2

Account Type

Increase/Decrease correc

Debit/Credit

Accounts Payable

correct

Liability

correct

cor

Increase

Credit

t

ct

Increase/Decrease correc

Debit/Credit

Paid cash for salaries Account #1

Account Type Salaries Expense

correct

Expense

correct

Increase

cor Debit

Paid cash for salaries t

ct

Record Transactions in Journal Format Glossary

Activity 3.a - Record Transactions as Journal Entries

Record the following transactions as journal entries. Paid $6,000 cash on account. Paid $6,000 cash on account.

Date

Accounts and Explanation

Debit correc

correc

Accounts Payable

Nov. 3

Credit correc

6,000

t

t

t

correc

correc

correc

Cash

6,000

t

t

t

Paid $8,000 cash for salaries Paid $8,000 cash for salaries

Date

Accounts and Explanation

Debit correc

correc

Salaries Expense

Nov. 4

Credit correc

8,000

t

t correc

t correc

correc

Cash t

8,000 t

Bright, the owner, contributed $9,000 in exchange for capital.

t

Bright, the owner, contributed $9,000 in exchange for capital.

Date

Accounts and Explanation

Debit correc

correc

Cash

Nov. 5

Credit correc

9,000

t

t

t

correc

correc

correc

Bright, Capital

9,000

t

t

t

Activity 3.b - More Practice with Journalizing Transactions

Record the following transactions as journal entries. Refer to the Chart of Accounts for account titles. Purchased $5,000 of office supplies on account. Purchased $5,000 of office supplies on account.

Date

Accounts and Explanation correct

Nov. 3

office supplies

Debit

Credit correc

correct

5,000 t correc

correct

accounts payable

correct

5,000 t

Purchase a $8,000 building with note Purchase a $8,000 building with note

Date

Accounts and Explanation correct

Nov. 4

Building correct

notes payable

Debit

Credit correc

correct

8,000 t correc

correct

8,000

Purchase a $8,000 building with note

Accounts and Explanation

Date

Debit

Credit

t

Paid $5,000 cash on account. Paid $5,000 cash on account.

Accounts and Explanation

Date

correct Nov. 5

Accounts Payable correct

Debit

Credit correc

correct

5,000 t correc

5,000

cash t

Review the transactions and determine the accounts, the account types (use assets; liabilities; owner, capital; owner, withdrawals; revenue; and expenses), if they increase/decrease and if they are DR/CR. List accounts in order they would be in the journal entry.

Purchase of building with note.

Account #1 correct

Account Type

correct

Increase/Decrease corre

Asset

Building

Account #2

correct

c

Increase

Account Type

correct

Debit

ct

rect

Increase/Decrease corre

Debit/Credit c

Increase

Liability

Notes Payable

Debit/Credit

Credit

ct

rect

Received cash on account from a customer. Account #1

Account Type correct

Cash

correct Assets

Account #2 Accounts Receiv

Debit/Credit correct

Increase

Account Type correct

Increase/Decrease correct

correct Assets

Debit

Increase/Decrease

Debit/Credit

Decrease

Credit

Provided services on account

Account #1

Account Type accounts receiva

Asset

correct

correct

Account #2

Account Type Service Revenue

correct

Purchased office supplies on account

Debit/Credit cor Debit

Increase

ct Debit/Credit Revenue

correct

Increase/Decrease correct

Increase/Decrease

cor Credit

Increase

ct

Provided services on account

Account #1

Account Type accounts receiva

Asset

Debit/Credit cor Debit

Increase

correct

correct

Account #1

Account Type

ct

Office Supplies

Asset

Increase/Decrease correct

Debit/Credit cor Debit

Increase

correct

correct

Account #2

Account Type

ct

Accounts Payable

liability

correct

Increase/Decrease correct

correct

Increase/Decrease incorre

Debit/Credit cor

Increase

ct

Credit

ct

Paid cash on account

Account #1

Debit/Credit

Account Type Accounts Payable

Liability

correct

correct

Account #2

Account Type Cash

Decrease

correct

Increase/Decrease correc Increase

t

Bright, the owner, invested cash in the business in exchange for capital. Account #1 Cash Account #2 Bright Capital

Account Type Asset Account Type Owner Capital

incor Debit

ect

Asset

correct

Increase/Decrease

Increase/Decrease Increase

Debit/Credit Debit

Increase/Decrease

Debit/Credit

Increase

Credit

Debit/Credit Credit

Paid cash on account Account #1

Account Type

Accounts Payable

Account #2

Increase/Decrease

Liability

Account Type

Cash

Debit/Credit

Decrease

Increase/Decrease

Asset

Debit

Debit/Credit

Decrease

Credit

Received cash on account from a customer. Account #1

Account Type

Cash

Asset

Account #2

Account Type

Accounts Receivable

Assets

Increase/Decrease Increase

Increase/Decrease

Debit/Credit Debit

Debit/Credit

Decrease

Credit

Paid for a one year insurance policy Account #1 Prepaid Insurance Account #2 Cash

Account Type

Increase/Decrease

Debit/Credit

Asset

Increase

Debit

Account Type

Increase/Decrease

Debit/Credit

Asset

Decrease

Credit

Bright, the owner, withdrew cash. Account #1 Bright Withdraw

Account #2 Cash

Account Type Owner Withdraw

Increase/Decrease Increase

Debit/Credit Debit

Account Type

Increase/Decrease

Debit/Credit

Asset

Decrease

Credit

Bought a company truck for $6,000 by signing a note at the bank Bought a company truck for $6,000 by signing a note at the bank

Accounts and Explanation

Date

Debit

Credit correc

Nov. 3

correct

6,000

Truck

t correc

correct

Notes Payable

correct

6,000 t

Purchased $5,000 of office supplies on account. Purchased $5,000 of office supplies on account.

Accounts and Explanation

Date

correct Nov. 4

Office Supplies

Debit

Credit correc

correct

5,000 t correc

correct

Accounts Payable

correct

5,000 t

Paid $7,000 cash for land Paid $7,000 cash for land

Accounts and Explanation

Date

correct Nov. 5

Land correct

Debit

Credit correc

correct

7,000 t correc

Cash

correct

7,000 t

Paid $6,000 cash on account. Paid $6,000 cash on account.

Accounts and Explanation

Date

correct Nov. 5

Accounts Payable

Debit

Credit correc

correct

6,000 t correc

correct

Cash

correct

6,000 t

Received $8,000 utility bill to be paid next month Received $8,000 utility bill to be paid next month

Accounts and Explanation

Date

correct Nov. 5

Utilities Expense

Debit

Credit correc

correct

8,000 t correc

incorrect

8,000

Utilities Payable t

Made payment on notes payable Account #1

Account Type Notes Payable

incorrect Liability

Increase/Decrease inco Decrease

Debit/Credit correct Debit

Made payment on notes payable rrect Account #2 Cash

Account Type

Increase/Decrease corr

incorrect

Debit/Credit correct

Decrease

Asset

incorrect

Credit

ect

Collected cash for future services

Account #1 correct

Account Type

incorrect

Increase/Decrease correc

Asset

Cash

Account #2

correct

Account Type

cor

Increase

incorrect Liability

Unearned Reven

Debit/Credit Debit

t

rect

Increase/Decrease incorr

Debit/Credit cor

Increase

Credit

ect

rect

Purchased office furniture on account Account #1

Account Type correct

Office Furniture

correct Asset

Account #2

Increase

Account Type correct

Accounts Payable

correct Liability

Increase/Decrease correct

Increase/Decrease incorrect Increase

Debit/Credit correct Debit

Debit/Credit correct Credit

Bright, the owner, contributed furniture in exchange for capital.

Account #1

correct

Account Type Asset

Furniture

correct

Account #2

correct

Account Type Owner Capital

Bright Capital

correct

Increase/Decrease correc

Debit/Credit cor

Increase

Debit

t

ct

Increase/Decrease correc

Debit/Credit cor

Increase

t

Credit

ct

Bright, the owner, invested cash in the business in exchange for capital.

Account #1 Cash

Account Type correct Asset

correct

Increase/Decrease corre Increase

c...