Debit and Credit Discussion

The      terms  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

1

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”

2

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.
 

Transactions:

1. Guttery      invested $154,000 in cash to start the business.
2. Paid      $5,400 for the current month’s rent.
3. Bought      office furniture for $16,120 in cash.
4. Performed      services for $7,600 in cash.
5. Paid      $1,190 for the monthly telephone bill.
6. Performed      services for $13,400 on credit.
7. Purchased      a computer and copier for $36,800; paid $12,400 in cash immediately with      the balance due in 30 days.
8. Received      $6,700 from credit clients.
9. Paid      $3,400 in cash for office cleaning services for the month.
10. Purchased      additional office chairs for $5,200; received credit terms of 30 days.
11. Purchased      office equipment for $34,000 and paid half of this amount in cash      immediately; the balance is due in 30 days.
12. Issued      a check for $8,800 to pay salaries.
13. Performed      services for $13,900 in cash.
14. Performed      services for $15,400 on credit.
15. Collected      $7,400 on accounts receivable from charge customers.
16. Issued      a check for $2,600 in partial payment of the amount owed for office chairs.
17. Paid      $640 to a duplicating company for photocopy work performed during the      month.
18. Paid      $1,160 for the monthly electric bill.
19. Guttery      withdrew $8,400 in cash for personal expenses.

Required:
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.
 

Analyze:
What is the change in owner’s equity for the month of June