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  • E.2-7 E.2-8

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    Neng Divia
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    This document contains an exercise with two parts. Part a outlines the basic accounting equation that assets equal liabilities plus equity and how various transactions like issuing shares, expenses, revenues, and dividends affect this equation. Part b shows the journal entries for four sample transactions - issuing shares, paying rent expense, earning revenue, and paying dividends - with corresponding debits and credits to accounts.

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    This document contains an exercise with two parts. Part a outlines the basic accounting equation that assets equal liabilities plus equity and how various transactions like issuing shares, expenses, revenues, and dividends affect this equation. Part b shows the journal entries for four sample transactions - issuing shares, paying rent expense, earning revenue, and paying dividends - with corresponding debits and credits to accounts.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    1 views6 pages

    E.2-7 E.2-8

    Uploaded by

    Neng Divia
    This document contains an exercise with two parts. Part a outlines the basic accounting equation that assets equal liabilities plus equity and how various transactions like issuing shares, expenses, revenues, and dividends affect this equation. Part b shows the journal entries for four sample transactions - issuing shares, paying rent expense, earning revenue, and paying dividends - with corresponding debits and credits to accounts.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 6

    EXERCISE 2-7

    (a) Assets = Liabilities +


    Equity
    1. + + (Issued shares)
    2. – – (Expense)
    3. + + (Revenue)
    4. – – (Dividends)
    (b) 1.
    Cash ...................................
    .............................. 5,500
    Share Capital—
    Ordinary...........................
    5,500
    2. Rent
    Expense..............................
    ..................... 1,100
    Cash....................................
    ....................... 1,100
    3. Accounts
    Receivable .........................
    ............. 4,700
    Service
    Revenue .............................
    .......... 4,700
    4.
    Dividends ..........................
    ............................... 400
    Cash....................................
    ....................... 400
    EXERCISE 2-7
    (a) Assets = Liabilities +
    Equity
    1. + + (Issued shares)
    2. – – (Expense)
    3. + + (Revenue)
    4. – – (Dividends)
    (b) 1.
    Cash ...................................
    .............................. 5,500
    Share Capital—
    Ordinary...........................
    5,500
    2. Rent
    Expense..............................
    ..................... 1,100
    Cash....................................
    ....................... 1,100
    3. Accounts
    Receivable .........................
    ............. 4,700
    Service
    Revenue .............................
    .......... 4,700
    4.
    Dividends ..........................
    ............................... 400
    Cash....................................
    ....................... 400
    Exercise 2-7
    a. Assets = Liabilities + Equity
    1. + + (Issued Shares)
    2. - - (Expense)
    3. + + (Revenue)
    4. - - (Dividens)
    b. 1. Cash …………………………………………… 5,500
    Share Capital-Ordinary …………… 5,500
    2. Rent Expense ……………………………… 1,100
    Cash ………………………………………. 1,100
    3. Accounts Receivable …………………… 4,700
    Service Revenue ……………………. 4,700
    4. Dividens ……………………………………… 400
    Cash ………………………………………. 400

    Exercise 2-8
    1. False. The general ledger contains all the asset, liability, and equity accounts.
    2. True.
    3. False. The accounts in the general ledger are arranged in financial statement order:
    first the assets, then the liabilities, share capital, retained earnings, dividens, revenues,
    and expenses.
    4. True.
    5. False. The general ledger is not a book of original entry; transactions are first
    recorded in the general journal, then in the general ledger.

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