@ProfdocDigitalLibraries <Best Online Study Materials>
Solution Manual & Answer Key
Horngren’s Financial Accounting
8th Edition
Author: Tracie Noble
,@ProfdocDigitalLibraries <Best Online Study Materials>
Chapter 2
Recording business transactions
Quick check
1. a
2. d 3. b 4. b 5. b
6. d
7. a
8. b
9. a
10. d
Starters (10 min.) S2-1
Req. 1
1. G
2. A
3. E
4. D
5. C
6. I
7. F
8. B
9. J
10. H
(5 min.) S2-2
Req. 1
Debits are increases for the following types of account:
• Assets
• Owners’ drawings Expenses
Debits are decreases for these types of account:
• Liabilities
• Owners’ capital
• Revenues
Req. 2
Credits are increases for these types of account:
• Liabilities
,Horngren's Accounting 8e Solutions Manual 2
• Owners’ capital
• Revenues
Credits are decreases for these types of account:
• Assets
• Owners’ drawings
• Expenses
(5 min.) S2-3
Req. 1
Normal balance
Debit or credit
Assets Debit
Liabilities Credit
Owners’ equity overall Credit
Capital Credit
Drawings Debit
Revenues Credit
Expenses Debit
(5 min.) S2-4
Req. 1
Step 1: Identify each account affected and its type.
Step 2: Determine whether each account is increased or decreased.
Step 3: Record the transaction in the journal.
Account Type Increase/
Decrease
5 Accounts receivable Asset Increase
Service revenue Owners’ equity Increase
28 Cash Asset Increase
Accounts receivable Asset Decrease
(10 min.) S2-5
Req. 1
Journal
, Horngren's Accounting 8e Solutions Manual 3
DATE ACCOUNTS AND EXPLANATIONS POST. DEBIT CREDIT
REF.
Jan 1 Cash 29 000
Brown, capital 29 000
Owner investment
2 Medical supplies 14 000
Accounts payable 14 000
Purchased supplies on account.
2 Rent expense 2 600
Cash 2 600
Paid office rent.
3 Accounts receivable 8 000
Service revenue 8 000
Performed service on account.
(10 min.) S2-6
Req. 1
Journal
DATE ACCOUNTS AND EXPLANATIONS POST. DEBIT CREDIT
REF.
Jan 22 Accounts receivable 10 000
Service revenue 10
000
Performed service on account.
30 Cash7 000
Accounts receivable 7 000
Received cash on account.
31 Electricity and gas expense 180
Accounts payable 180
Received electricity and gas bill.
31 Salary expense 1 000
Solution Manual & Answer Key
Horngren’s Financial Accounting
8th Edition
Author: Tracie Noble
,@ProfdocDigitalLibraries <Best Online Study Materials>
Chapter 2
Recording business transactions
Quick check
1. a
2. d 3. b 4. b 5. b
6. d
7. a
8. b
9. a
10. d
Starters (10 min.) S2-1
Req. 1
1. G
2. A
3. E
4. D
5. C
6. I
7. F
8. B
9. J
10. H
(5 min.) S2-2
Req. 1
Debits are increases for the following types of account:
• Assets
• Owners’ drawings Expenses
Debits are decreases for these types of account:
• Liabilities
• Owners’ capital
• Revenues
Req. 2
Credits are increases for these types of account:
• Liabilities
,Horngren's Accounting 8e Solutions Manual 2
• Owners’ capital
• Revenues
Credits are decreases for these types of account:
• Assets
• Owners’ drawings
• Expenses
(5 min.) S2-3
Req. 1
Normal balance
Debit or credit
Assets Debit
Liabilities Credit
Owners’ equity overall Credit
Capital Credit
Drawings Debit
Revenues Credit
Expenses Debit
(5 min.) S2-4
Req. 1
Step 1: Identify each account affected and its type.
Step 2: Determine whether each account is increased or decreased.
Step 3: Record the transaction in the journal.
Account Type Increase/
Decrease
5 Accounts receivable Asset Increase
Service revenue Owners’ equity Increase
28 Cash Asset Increase
Accounts receivable Asset Decrease
(10 min.) S2-5
Req. 1
Journal
, Horngren's Accounting 8e Solutions Manual 3
DATE ACCOUNTS AND EXPLANATIONS POST. DEBIT CREDIT
REF.
Jan 1 Cash 29 000
Brown, capital 29 000
Owner investment
2 Medical supplies 14 000
Accounts payable 14 000
Purchased supplies on account.
2 Rent expense 2 600
Cash 2 600
Paid office rent.
3 Accounts receivable 8 000
Service revenue 8 000
Performed service on account.
(10 min.) S2-6
Req. 1
Journal
DATE ACCOUNTS AND EXPLANATIONS POST. DEBIT CREDIT
REF.
Jan 22 Accounts receivable 10 000
Service revenue 10
000
Performed service on account.
30 Cash7 000
Accounts receivable 7 000
Received cash on account.
31 Electricity and gas expense 180
Accounts payable 180
Received electricity and gas bill.
31 Salary expense 1 000
