Book 1 - Chapter 20

20-4, continued

b. Bryan Company

Analysis: (identify which accounts increase and/or which accounts decrease): The asset Cash
increases by $1,000 and the asset Accounts Receivable decreases by $1,000.

Rules (specify what entries on the left or right side of the accounts are required): Assets are
increased by a left-side entry, so record $1,000 on the left side of Cash. Assets are decreased
by a right-side entry, so record $1,000 on the right side of Accounts Receivable.

c. Mountain View Company

Analysis: (identify which accounts increase and/or which accounts decrease): The asset Cash
increases by $10,000 and the owner’s equity D. Mason, increases by $10,000.

Rules (specify what entries on the left or right side of the accounts are required): Assets are increased by a left-side entry, so record $10,000 on the left side of Cash. Owner’s equity is
increased by a right-side entry, so record $10,000 on the right side of D. Mason Capital.

Learning Goal 20, continued

SOLUTIONS

Section V · Using a Basic Accounting System

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