contestada

The following transactions occur for the Wolf pack Shoe Company during the month of June:________.
A. Provide services to customers for $28,000 and receive cash.
B. Purchase office supplies on account for $18,000.
C. Pay $6,600 in salaries to employees for work performed during the month.

Respuesta :

Answer:

                                         Debit                 Credit

A. Cash                         $28,000

    Sales                                                     $28,000

B. Office Expenses      $18,000

    A/c Payable                                           $18,000

C. Salaries Expenses   $6,600

    Cash/Bank                                             $6,600

Explanation:

Accounting double entry rules are follows:

Debit: Increase in Assets, Increase in Expenses. (vice versa in credit side)

Credit: Increase in Liability, Increase in income, Increase in capital. (vice versa in debit side)

A. When services are provided it is recorded as an income on the credit side and cash received against the services are recorded in the debit side as it a current asset. (provided that the services provided and consumed are not for more than one month)

B. Office supplies are the office day to day expenses which needs to be recorded on the debit side. while on account payment is recorded on the credit side as a liability.

C. Salaries are expenses which needs to be recorded on the debit side and cash or bank will be credited as decrease in assets.