Example Problem Tom Jones is a sole proprietor that owns and manages a music store that sells music CDs and DVD music videos. Use the following information to design and complete a chart of accounts: 1. 2. 3. 4. Customers cannot use commercial credit cards, but Torn has inhouse credit. Cash in the bank includes a checking account, savings account, change fund and petty cash fund. Tom pays for rent and insurance in advance. 1When Torn started the business he purchased land, a building used for the store, furniture and fixtures, and computer equipment. There have been no additional purchases. The are no shortterm or longterm investments Tom issued a 90 dayr note to a customer that could not pay the amount owed that was recorded in accounts receivable. There are no notes payable. Toms earns interest on both the checking account and the savings account. Tom has two employees that are paid hourly wages. The employees do not receive any benets. Tom uses the perpetual inventory system. Tom uses the accrual basis of accounting to record transactions