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Selected transactions for Front Room, an interior decorator corporation, in its first month of business, are as follows.

Selected transactions for Front Room, an interior decorator corporation, in its first month of business, are as follows.

1.   Issued stock to investors for $16,600 in cash.
2.   Purchased used car for $10,700 cash for use in business.
3.   Purchased supplies on account for $200.
4.   Billed customers $4,860 for services performed.
5.   Paid $290 cash for advertising start of the business.
6.   Received $1,570 cash from customers billed in transaction (4).
7.   Paid creditor $410 cash on account.
8.   Paid dividends of $350 cash to stockholders

Expense, Service Revenue, etc.); whether the specific account is increased or decreased; and the normal balance of the specific account.

   
Account Debited
 
Account Credited
No.
 
Basic Type
 
Specific Account
 
Effect
 
Normal Balance
 
Basic Type
 
Specific Account
 
Effect
 
Normal Balance
1.
  Asset   Cash   Increase   Debit   Stockholders’ Equity   Common Stock   Increase   Credit
                                 
2.
  choose a basic type
 Stockholders’ EquityLiabilityAsset
  choose a specific account
 Accounts PayableService RevenueCashEquipmentSuppliesAccounts ReceivableAdvertising ExpenseDividends
  select between increase and decrease
 IncreaseDecrease
  select between debit and credit
 CreditDebit
  choose a basic type
 AssetStockholders’ EquityLiability
  choose a specific account
 Accounts ReceivableCashService RevenueSuppliesAdvertising ExpenseAccounts PayableDividendsEquipment 
  select between increase and decrease
 IncreaseDecrease
  select between debit and credit
 DebitCredit
                                 
3.
  choose a basic type
 Stockholders’ EquityAssetLiability
  choose a specific account
 Accounts ReceivableAdvertising ExpenseAccounts PayableCashDividendsSuppliesService RevenueEquipment
  select between increase and decrease
 IncreaseDecrease
  select between debit and credit
 CreditDebit
  choose a basic type
 AssetStockholders’ EquityLiability
  choose a specific account
 DividendsAccounts PayableAdvertising ExpenseSuppliesEquipment CashService RevenueAccounts Receivable
  select between increase and decrease
 IncreaseDecrease
  select between debit and credit
 DebitCredit
                                 
4.
  choose a basic type
 Stockholders’ EquityLiabilityAsset
  choose a specific account
 DividendsAccounts ReceivableEquipmentAdvertising ExpenseSuppliesAccounts PayableService RevenueCash
  select between increase and decrease
 DecreaseIncrease
  select between debit and credit
 CreditDebit
  choose a basic type
 LiabilityAssetStockholders’ Equity
  choose a specific account
 Equipment Accounts PayableSuppliesDividendsCashService RevenueAdvertising ExpenseAccounts Receivable
  select between increase and decrease
 IncreaseDecrease
  select between debit and credit
 CreditDebit
                                 
5.
  choose a basic type
 LiabilityAssetStockholders’ Equity
  choose a specific account
 Accounts ReceivableAccounts PayableDividendsService RevenueAdvertising ExpenseSuppliesEquipmentCash
  select between increase and decrease
 DecreaseIncrease
  select between debit and credit
 DebitCredit
  choose a basic type
 Stockholders’ EquityLiabilityAsset
  choose a specific account
 Service RevenueDividendsEquipment Accounts PayableCashAccounts ReceivableAdvertising ExpenseSupplies
  select between increase and decrease
 DecreaseIncrease
  select between debit and credit
 DebitCredit
                                 
6.
  choose a basic type
 Stockholders’ EquityLiabilityAsset
  choose a specific account
 Accounts PayableService RevenueCashAdvertising ExpenseEquipmentSuppliesAccounts ReceivableDividends
  select between increase and decrease
 DecreaseIncrease
  select between debit and credit
 CreditDebit
  choose a basic type
 Stockholders’ EquityLiabilityAsset
  choose a specific account
 Advertising ExpenseEquipment Accounts ReceivableService RevenueDividendsAccounts PayableSuppliesCash
  select between increase and decrease
 DecreaseIncrease
  select between debit and credit
 DebitCredit
                                 
7.
  choose a basic type
 LiabilityStockholders’ EquityAsset
  choose a specific account
 Advertising ExpenseAccounts PayableDividendsService RevenueSuppliesAccounts ReceivableCashEquipment
  select between increase and decrease
 IncreaseDecrease
  select between debit and credit
 CreditDebit
  choose a basic type
 Stockholders’ EquityLiabilityAsset
  choose a specific account
 DividendsEquipment SuppliesCashService RevenueAccounts ReceivableAccounts PayableAdvertising Expense
  select between increase and decrease
 DecreaseIncrease
  select between debit and credit
 CreditDebit
                                 
8.
  choose a basic type
 LiabilityStockholders’ EquityAsset
  choose a specific account
 SuppliesCashEquipmentAccounts PayableAccounts ReceivableDividendsAdvertising ExpenseService Revenue
  select between increase and decrease
 IncreaseDecrease
  select between debit and credit
 DebitCredit
 

Sep 01 2020 View more View Less

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