Book 1 - Chapter 20

20-3, continued

Cash
	300

Accts. Payable
300

Increase/decrease: Cash decreases and Accounts Payable decreases.

Description: The business used $300 cash to pay $300 owing of accounts payable.

Accts. Receivable
2,800

Anna Chan, Capital
	2,800

Increase/decrease: Accounts Receivable increases and Anna Chan, Capital increases.

Description: (from operations) The business earned $2,800 revenue by providing services
to customers on account. Revenue earned increases the owner’s capital.

Prepaid Insurance
500

Cash
	500

Increase/decrease: Prepaid Insurance increases and Cash decreases.

Description: The business used up $500 cash to buy some prepaid insurance.

Supplies
	150

Anna Chan, Capital
150

Increase/decrease: Supplies decrease and Anna Chan, Capital decreases.

Description: (from operations) The business used up $150 of supplies; this is an expense
that decreased the owner’s capital.

Cash
750

Unearned Revenue
	750

Increase/decrease: Cash increases and the liability Unearned Revenue increases.

Description: The business received a $750 advance payment from a customer, before
services were provided to the customer.

Cash
	1,000

Anna Chan, Capital
1,000

Increase/decrease: Cash decreases and Anna Chan, Capital decreases.

Description: (not from operations) The owner, Anna Chan, withdrew $1,000 cash from
her business for personal use.

Learning Goal 20, continued

SOLUTIONS

Section V · Using a Basic Accounting System

Home

Home || Book Publications || Professor’s Office || Student Info & Resources || Useful Links

Worthy & James Publishing is a provider of basic accounting books covering fundamental accounting principles, business accounting, and business math. Topics in financial accounting and business accounting covered include the balance sheet, the income statement, financial ratios, and bank reconciliation.