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Learning Goal: I’m working on a business question and need an explanation and answer to help me learn.
Please answer the discussion questions and question 2 below, and then reply to one of your classmates’ posts.
Discussion Question number 1
The terms debit and credit are often used in describing the effects of transactions on different accounts. What do these terms mean?
How are you remembering the debit and credit rules?
Respond to your classmates posts
This is a participation grade and replies to a classmate’s posting and related question should contribute to the ongoing conversation.
Consider the following when composing replies to a classmate:
Provide an alternative perspective
Help your classmate with an explanation that offers insight to their question.
Ask questions to further the discussion
Provide additional resources (websites, books, articles)
Discuss why you agree or disagree with a classmates’ post. Can you offer an alternative solution to the question posed by your classmate
reponed to student
Jennifer Small posted
debit is the money that you directly get and credit is what is owed to you but not yet paid in full. I remember debit by think debit as direct and I remember credit as “coming” as in not yet collected in full. credit increases libilities and debit decreases, I link the two d’s from debit and decrease to help me remember. in assets its the opposite debit increases assets and credit decreases. debit is on the right side and credit is on the left, I remember this by thinking “ALright! I got money” and credit as ” oh come on how much time left”
Juan Vega Salinas
The terms debit and credit are polar opposites. On one hand, is debit which means that the amount in that section increases. On the other hand, is credit which means that the amount in that section decreases. There are scenarios where the two can be reversed and credit increases and debit decreases like for example on a liability account. As for remembering the two terms I am on track to learn them as long as I continue to study them. However, I do know that debit is on the left and credit is on the right which is a start.
Questions number 2
The accountant for the firm owned by Randy Guttery prepares financial statements at the end of each month. The following transactions for Randy Guttery, Landscape Consultant took place during the month ended June 30, 2019.
Guttery invested $154,000 in cash to start the business.
Paid $5,400 for the current month’s rent.
Bought office furniture for $16,120 in cash.
Performed services for $7,600 in cash.
Paid $1,190 for the monthly telephone bill.
Performed services for $13,400 on credit.
Purchased a computer and copier for $36,800; paid $12,400 in cash immediately with the balance due in 30 days.
Received $6,700 from credit clients.
Paid $3,400 in cash for office cleaning services for the month.
Purchased additional office chairs for $5,200; received credit terms of 30 days.
Purchased office equipment for $34,000 and paid half of this amount in cash immediately; the balance is due in 30 days.
Issued a check for $8,800 to pay salaries.
Performed services for $13,900 in cash.
Performed services for $15,400 on credit.
Collected $7,400 on accounts receivable from charge customers.
Issued a check for $2,600 in partial payment of the amount owed for office chairs.
Paid $640 to a duplicating company for photocopy work performed during the month.
Paid $1,160 for the monthly electric bill.
Guttery withdrew $8,400 in cash for personal expenses.
Prepare a trial balance, an income statement, a statement of owner’s equity, and a balance sheet. Assume that the transactions took place during the month ended June 30, 2019. Determine the account balances before you start work on the financial statements.
What is the change in owner’s equity for the month of June