Hokies uses the following accounts Equipment Supplies Accounts Payable Cash Prep

Question

Hokies uses the following accounts Equipment Supplies Accounts Payable Cash Prepaid Rent Common Stock Salaries Payable ent Expense Notes Payable Salaries Expense Accounts Receivable Utilities Expense Service Revenue Retained Earnings Dividends Required Indicate which accounts should be debited and which should be credited for the following transactions of Hokies company. Transactions Account Debited Account Credited Example: Purchase equipment in exchange for cash 1. Pay a cash dividend 2. Pay rent in advance for the next three months 3. Provide services to customers on account. 4. Purchase office supplies on account. 5. Pay salaries for the current month 6. Issue common stock in exchange for cash Equipment Cash Collect cash from customers for services provided in (3) above 8. Borrow cash from the bank and sign a note 9.Pay for the current month's utilities 10. Pay for office supplies purchased in (4) above

Explanation / Answer

a) Retained Earnings

b) Dividend

a) Dividends

b) Cash

a) Salaries expense

b) Salaries Payable

a) Salaries Payable

b) Cash

Transactions Account Debited Account Credited 1 Pay a cash dividend

a) Retained Earnings

b) Dividend

a) Dividends

b) Cash

2 Pay rent in advance for next 3 months Prepaid rent Cash 3 Provide services to customer on account Account receivable Service Revenue 4 Purchase office supplies on account Supplies Accounts Payable 5 Pay salaries for current month

a) Salaries expense

b) Salaries Payable

a) Salaries Payable

b) Cash

6 Issue common stock in exchange of cash Cash Common stock 7 Collect cash for services provided in (3) above Cash Accounts Receivable 8 Borrow cash from bank and sign a note Cash Notes payable 9 Pay for the current month's utilities Utilities Expense Cash 10 Pay for office supplies purchased in (4) above Accounts Payable Cash

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