Chapter 2: Exercise 10 (vocab)

Short Exercises 5*, 8, & 9

*Please use this Chart of Accounts for Short Exercise 5: Cash, A/R, Medical Supplies, A/P, Common Stock, Service Revenue, Rent Expense

52-8 HW Service Revenue Salaries Payable Salaries Expense Cash $ 25,000 1,600 $ 26,000 36,000 17,000 24,000 Equipment Rent Expense Common Stock Accounts Payable Dividends Accounts Receivable 7,000 3,600 6,000 2,200 16,100 Interest Payable Utilities Expense 1,900 Prepare the trial balance of Smithson Floor Coverings at December 31, 2018. SOLUTION S2-9 Calculating debt ratio Learning Objective 5 Aladdin Carpet Care had the following total assets, liabilities, and equity as of October 31: Assets $ 200,000 Liabilities 30,000 Equity 170,000 What is Aladdin Carpet Care's debt ratio as of October 31? S2-5 Journalizing transactions Learning Objective 3 John Daniel opened a medical practice in Sacramento, California, and had the following transactions during the month of January. Jan. 1 The business received $34,000 cash and issued common stock to Daniel. 2 Purchased medical supplies on account, $17,000. 4 Performed services for patients receiving $1,600. 12 Paid monthly office rent of $3,000. 15 Recorded $7,000 revenue for services rendered to patients on account. Journalize the transactions of John Daniel, M.D. Include an explanation with each entry. Exercises E2-10 Using accounting vocabulary Learning Objectives 1, 2, 3, 4 Match the accounting terms with the corresponding definitions. 1. Posting a. A detailed record of all increases and decreases that have occurred in 2. Account a particular asset, liability, or equity during a period b. The record holding all the accounts of a business, the changes in those 3. Debit accounts, and their balances 4. Journal c. A journal entry that is characterized by having multiple debits and/or 5. Chart of accounts multiple credits 6. Trial balance d. A record of transactions in date order 7. Normal balance Left side of a T-account 8. Ledger f. Side of an account where increases are recorded 9. Credit g. Transferring amounts from the journal to the ledger 10. Compound journal entry h. Right side of a T-account i. A list of all accounts with their balances at a point in time j. A list of all accounts with their account numbers e