Chapter 2 T Accounts
1.
2.
3.
4.
5.
Decide which accounts are involved.
Classify the accounts involved (asset, liability, capital, revenue, expense)
Decide if the accounts involved are increased or decreased.
Decide which accounts are debited and which accounts are credited.
Check to see if the equation is in balance after the transaction has been
recorded.
Chart of Accounts – Cline’s Computer Clinic
Chapter 2 Transactions
Assets =
+
-
Liabilities
-
+
+
Owner’s Equity +
-
Revenue
+
-
-
+
Expenses
+
-
a) Cline deposited $82,000 in a bank account in the name of the business.
b) Cline’s Computer Clinic bought equipment, paying cash, $64,000.
c) Cline’s Computer Clinic bought equipment on account from Surgo Products, $10,000.
d) Cline’s Computer Clinic paid Surgo Products, a creditor (Accounts Payable), $6,000.
e) R. P. Cline invested her personal computer in the business with a fair market value of $6,200.
f) Cline’s Computer Clinic sold services for cash, $3,520.
g) Cline’s Computer Clinic paid rent for the month, $900.
h) Cline’s Computer Clinic bought CD-R recordable compact discs and holders, manuals,
and invoice forms for $870 on account from Freeman Company. (Supplies Expense)
i) Cline’s Computer Clinic bought a one-year liability insurance policy, $480. (paid cash)
j) Cline’s Computer Clinic received a bill for newspaper advertising from the Daily, $340.
(did not pay it yet – Accounts Payable)
k) Cline’s Computer Clinic sold services on account (Accounts Receivable) to Computer
Makeovers, $1,470.
l) Cline’s Computer Clinic paid on account to Surgo Products, $1,800.
m) Cline’s Computer Clinic received and paid the electric bill, $320.
n) Cline’s Computer Clinic paid on account to the Daily, $340. (Remember, this was
already put into the Expense category in transaction J. Now you are just paying the bill.)
o) Cline’s Computer Clinic paid the wages of the part-time employee, $2,980.
p) Cline’s Computer Clinic bought additional equipment from Surgo Products, $3,520,
paying $620 in cash and placing the balance on account.
q) Cline’s Computer Clinic received cash from Computer Makeovers on account (Accounts
Receivable), $850.
r) Cline’s Computer Clinic sold services for cash, $6,020.
s) R. P. Cline withdrew cash for her personal use, $3,000.