1. © 2000 South-Western Educational Publishing THE ACCOUNTING EQUATION Lesson 1-1, page 7

2. © 2000 South-Western Educational Publishing T ERMS REVIEW accounting accounting system accounting records service business proprietorship Lesson 1-1, page 8 asset equities liability owner’s equity accounting equation

3. © 2000 South-Western Educational Publishing RECEIVING CASH Lesson 1-2, page 9 Transaction 1 August 1. Received cash from owner an an investment, $10,000.00.

4. © 2000 South-Western Educational Publishing PAYING CASH Lesson 1-2, page 10 Transaction 2 August 3. Paid cash for supplies, $1,577.00. Transaction 3 August 4. Paid cash for insurance, $1,200.00.

5. © 2000 South-Western Educational Publishing TRANSACTIONS ON ACCOUNT Lesson 1-2, page 11 Transaction 4 August 7. Bought supplies on account from Ling Music Supplies, $2,720.00. Transaction 5 August 11. Paid cash on account to Ling Music Supplies, $1,360.00.

6. © 2000 South-Western Educational Publishing T ERMS REVIEW transaction account account title account balance capital Lesson 1-2, page 12

7. © 2000 South-Western Educational Publishing RECEIVED CASH FROM SALES Lesson 3-3, page 51 August 12. Received cash from sales, $325.00. 1 3 4 22 3 4 1 1.Cash and Sales are affected. 4.Cash is debited. Sales is credited. 3.Assets are increased. Owner’s equity is increased. 2.Cash is an asset. Sales is a revenue account that affects owner’s equity.

8. © 2000 South-Western Educational Publishing SOLD SERVICES ON ACCOUNT Lesson 3-3, page 52 August 12. Sold services on account to Kids Time, $200.00. 1 3 4 22 3 4 1 1.Accounts Receivable—Kids Time and Sales are affected. 4.Accounts Receivable—Kids Time is debited. Sales is credited. 3.Assets are increased. Owner’s equity is increased. 2. Accounts Receivable—Kids Time is an asset. Sales is a revenue account that affects owner’s equity.

9. © 2000 South-Western Educational Publishing 2.Cash is an asset. Rent Expense is an expense account that affects owner’s equity. 3.Assets are decreased. Owner’s equity is decreased; expenses are increased. PAID CASH FOR AN EXPENSE Lesson 3-3, page 53 August 12. Paid cash for rent, $250.00. 1 3 4 2 3 4 1 1.Rent Expense and Cash are affected. 4.Rent Expense is debited. Cash is credited. 2 3

10. © 2000 South-Western Educational Publishing 1.Cash and Accounts Receivable—Kids Time are affected. 4.Cash is debited. Accounts Receivable—Kids Time is credited. 3.Assets (Cash) are increased. Assets (Accounts Receivable—Kids Time) is decreased. 2. Cash and Accounts Receivable—Kids Time are assets. RECEIVED CASH ON ACCOUNT Lesson 3-3, page 54 August 12. Received cash on account from Kids Time, $100.00. 1 3 4 2 4 1 3

11. © 2000 South-Western Educational Publishing 5.Add amounts and compare the totals. PREPARING A BALANCE SHEET Lesson 1-3, page 14 5 1 3 4 2 7 6 1.Write the heading. 2.Prepare the assets section. 3.Prepare the liabilities section. 4.Prepare the owner’s equity section. 6.Rule single lines. 7.Write the totals. 8.Rule double lines. 8

12. © 2000 South-Western Educational Publishing T ERMS REVIEW balance sheet Lesson 1-3, page 15

13. © 2000 South-Western Educational Publishing REVENUE TRANSACTIONS Lesson 2-1, page 26 Transaction 6 August 12. Received cash from sales, $325.00. Transaction 7 August 12. Sold services on account to Kids Time, $200.00.

14. © 2000 South-Western Educational Publishing PAID CASH FOR EXPENSES Transaction 8 August 12. Paid cash for rent, $250.00. Transaction 9 August 12. Paid cash for telephone bill, $45.00. Lesson 2-1, page 27 –45 (expense)

15. © 2000 South-Western Educational Publishing OTHER TRANSACTIONS Lesson 2-1, page 28 Transaction 10 August 12. Received cash on account from Kids Time, $100.00. Transaction 11 August 12. Paid cash to owner for personal use, $100.00. –100 (withdrawal)

16. © 2000 South-Western Educational Publishing Transaction Change in NumberKind of TransactionOwner’s Equity 6Revenue (cash)+325.00 7Revenue (on account)+200.00 8Expense (rent)–250.00 9Expense (telephone)–45.00 11Withdrawal–100.00 Net change in owner’s equity+130.00 SUMMARY OF CHANGES IN OWNER’S EQUITY Lesson 2-1, page 28

17. © 2000 South-Western Educational Publishing T ERMS REVIEW revenue sale on account expense withdrawals Lesson 2-1, page 29

18. © 2000 South-Western Educational Publishing 5.Add and compare the totals. BALANCE SHEET PREPARATION 5 1 3 4 2 7 6 1.Write the heading. 2.Prepare the assets section. 3.Prepare the liabilities section. 4.Prepare the owner’s equity section. 6.Rule single lines. 7.Write the totals. 8.Rule double lines. 8 Lesson 2-2, page 30

19. © 2000 South-Western Educational Publishing ACCOUNTS Lesson 3-1, page 42

20. © 2000 South-Western Educational Publishing ACCOUNT BALANCES Lesson 3-1, page 42

21. © 2000 South-Western Educational Publishing INCREASES AND DECREASES IN ACCOUNTS Lesson 3-1, page 43

22. © 2000 South-Western Educational Publishing T ERMS REVIEW T account debit credit normal balance Lesson 3-1, page 44

23. © 2000 South-Western Educational Publishing A FIVE-COLUMN JOURNAL Lesson 4-1, page 66

24. © 2000 South-Western Educational Publishing CHECKS Lesson 4-1, page 67

25. © 2000 South-Western Educational Publishing RECEIVED CASH FROM OWNER AS AN INVESTMENT Lesson 3-2, page 45 August 1. Received cash from owner an an investment, $10,000.00. 1 3 4 22 3 4 1 1.Cash and Barbara Treviño, Capital are affected. 4.Cash is debited. Barbara Treviño, Capital is credited. 3.Assets are increased. Owner’s Equity is increased. 2.Cash is an asset account. Barbara Treviño, Capital is an owner’s equity account.

26. © 2000 South-Western Educational Publishing 3.Assets (Supplies) are increased. Assets (Cash) are decreased. PAID CASH FOR SUPPLIES Lesson 3-2, page 46 August 3. Paid cash for supplies, $1,577.00. 1 3 4 2 3 4 1 1.Supplies and Cash are affected. 4.Supplies is debited. Cash is credited. 2.Supplies and Cash are assets.

27. © 2000 South-Western Educational Publishing 3.Assets (Prepaid Insurance) are increased. Assets (Cash) are decreased. PAID CASH FOR INSURANCE Lesson 3-2, page 47 August 4. Paid cash for insurance, $1,200.00. 1 3 4 2 3 4 1 1.Prepaid Insurance and Cash are affected. 4.Prepaid Insurance is debited. Cash is credited. 2.Prepaid Insurance and Cash are assets.

28. © 2000 South-Western Educational Publishing BOUGHT SUPPLIES ON ACCOUNT Lesson 3-2, page 48 August 7. Bought supplies on account from Ling Music Supplies, $2,720.00. 1 3 4 22 3 4 1 1.Supplies and Accounts Payable—Ling Music Supplies are affected. 4.Supplies is debited. Accounts Payable—Ling Music Supplies is credited. 3.Assets are increased. Liabilities are increased. 2.Supplies is an asset. Accounts Payable—Ling Music Supplies is a liability.

29. © 2000 South-Western Educational Publishing PAID CASH ON ACCOUNT Lesson 3-2, page 49 August 11. Paid cash on account to Ling Music Supplies, $1,360.00. 1 3 4 22 3 4 1 1.Accounts Payable—Ling Music Supplies and Cash are affected. 4. Accounts Payable—Ling Music Supplies is debited. Cash is credited. 3.Assets are decreased. Liabilities are decreased. 2.Cash is an asset. Accounts Payable—Ling Music Supplies is a liability.

30. © 2000 South-Western Educational Publishing T ERMS REVIEW chart of accounts Lesson 3-2, page 50

31. © 2000 South-Western Educational Publishing SALES INVOICES Lesson 4-1, page 67

32. © 2000 South-Western Educational Publishing OTHER SOURCE DOCUMENTS Lesson 4-1, page 68

33. © 2000 South-Western Educational Publishing RECEIVED CASH FROM OWNER AS AN INVESTMENT Lesson 4-1, page 69 August 1. Received cash from owner as an investment, $10,000.00. Receipt No. 1.

34. © 2000 South-Western Educational Publishing RECEIVED CASH FROM OWNER AS AN INVESTMENT Lesson 4-1, page 69 August 1. Received cash from owner as an investment, $10,000.00. Receipt No. 1. 1.Which accounts are affected? Cash Barbara Treviño, Capital 4.How is each amount entered in the accounts? Assets increase on the debit side. Owner’s equity accounts increase on the credit side. 3.How is each classification changed? Assets are increased. Owner’s equity is increased. 2.How is each account classified? Cash is an asset account. Barbara Treviño, Capital is an owner’s equity account. Barbara Treviño, Capital Cash Debit Normal Balance Credit Normal Balance  10,000.00 

35. © 2000 South-Western Educational Publishing RECEIVED CASH FROM OWNER AS AN INVESTMENT Lesson 4-1, page 69 August 1. Received cash from owner as an investment, $10,000.00. Receipt No. 1. 1. Write the date. 124 4.Write the source document number. 2.Debit Cash. 3.Credit Barbara Treviño, Capital. 3 3

36. © 2000 South-Western Educational Publishing 3.Credit Cash. PAID CASH FOR SUPPLIES Lesson 4-1, page 70 1. Write the date. 4.Write the source document number. 2.Debit Supplies. 22341

37. © 2000 South-Western Educational Publishing T ERMS REVIEW journal journalizing special amount column general amount column entry double-entry accounting Lesson 4-1, page 71 source document check invoice sales invoice receipt memorandum