lOMoARcPSD|8199826 Ch02 Financial Accounting with International Financial Reporting Standards, 4th Edition Financial Accounting with IFRS,4th Edition ()ةينطولا حاجنلا ةعماج StuDocu is not sponsored or endorsed by any college or university Downloaded by K? Quân Nguy?n (kyquan0306@gmail.com) lOMoARcPSD|8199826 CHAPTER 2 The Recording Process ASSIGNMENT CLASSIFICATION TABLE Brief Learning Objectives Questions Exercises Do It! Exercises Problems 1. Describe how accounts, 1, 2, 3, 4, 5, 1, 2 1 1, 2 1, 2, 3, 5 debits, and credits are used 6, 7, 8, 9, 19, to record business 21 transactions. Indicate how a journal is 10, 11, 12, 3, 4, 5, 6 2 3, 4, 5, 6, 7, 1, 2, 3, 5 used in the recording 13, 14, 16 8, 9, 12, 13, process. Explain how a ledger and 15, 17 7, 8 3 10, 11, 14, 2, 3, 5 posting help in the recording 17 process.
Prepare a trial balance. 18, 20 9, 10 4 11, 12,13, 2, 3, 4, 5 15, 16, 17 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) 2-1 Downloaded by K? Quân Nguy?n (kyquan0306@gmail.com) lOMoARcPSD|8199826 ASSIGNMENT CHARACTERISTICS TABLE Problem Difficulty Time Allotted Number Description Level (min.) 1 Journalize a series of transactions. Simple 20–30 2 Journalize transactions, post, and prepare a trial balance. Simple 30–40 3 Journalize transactions, post, and prepare a trial balance.
Moderate 40–50 4 Prepare a correct trial balance. Moderate 30–40 5 Journalize transactions, post, and prepare a trial balance. Moderate 40–50 2-2 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) Downloaded by K? Quân Nguy?n (kyquan0306@gmail.com) lOMoARcPSD|8199826 WEYGANDT FINANCIAL ACCOUNTING, IFRS 4E CHAPTER 2 THE RECORDING PROCESS Number LO BT Difficulty Time (min.) BE1 1 C Simple 6–8 BE2 1 C Simple 4–6 BE3 2 AP Simple 4–6 BE4 2 C Moderate 4–6 BE5 2 C Simple 6–8 BE6 2 AP Simple 4–6 BE7 3 AP Simple 4–6 BE8 3 AP Simple 4–6 BE9 4 AP Simple 4–6 BE10 4 AN Moderate 6–8 DI1 1 C Simple 3–5 DI2 2 AP Simple 3–5 DI3 3 AP Simple 2–4 DI4 4 AP Simple 6–8 EX1 1 K Simple 2–4 EX2 1 C Simple 10–15 EX3 2 AP Simple 8–10 EX4 2 C Simple 6–8 EX5 2 AP Simple 6–8 EX6 2 AP Simple 6–8 EX7 2 AP Simple 8–10 EX8 2 AP Moderate 10–15 EX9 2 AP Moderate 10–15 EX10 3 K Simple 2–4 EX11 3, 4 AP Simple 10–12 EX12 2, 4 AP Moderate 10–12 EX13 2, 4 AP Moderate 12–15 EX14 2, 3 AP Moderate 12–15 EX15 4 AN Moderate 6–8 EX16 4 AP Simple 8–10 EX17 2, 3, 4 AP Moderate 30–40 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) 2-3 Downloaded by K? Quân Nguy?n (kyquan0306@gmail.com) lOMoARcPSD|8199826 THE RECORDING PROCESS (Continued) Number LO BT Difficulty Time (min.) P1 1, 2 AP Simple 20–30 P2 1, 2, 3, 4 AP Simple 30–40 P3 1, 2, 3, 4 AP Moderate 40–50 P4 4 AN Moderate 30–40 P5 1, 2, 3, 4 AP Moderate 40–50 CT1 1 C Simple 8–10 CT2 1, 2 AN Simple 8–10 CT3 — AP Simple 15–20 CT4 — AP, S Simple 15–20 CT5 3, 4 AP, S Moderate 20–30 CT6 4 AN, E Moderate 10–15 CT7 2 E Simple 10–12 CT8 2 E Moderate 15–20 CT9 — AP Moderate 15–20 2-4 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) Downloaded by K? Quân Nguy?n (kyquan0306@gmail.com) lOMoARcPSD|8199826 Copyright © 2018 WILEY BLOOM’S TAXONOMY TABLE Correlation Chart between Bloom’s Taxonomy, Learning Objectives and End-of-Chapter Exercises and Problems Learning Objective Knowledge Comprehension Application Analysis Synthesis Evaluation 1. Describe how accounts, Q2.5 debits, and credits are used to Q2.2 record business transactions.3 Weygandt, Accounting Principles, IFRS 1/e, Solutions Manual Q2.
Indicate how a journal is used Q2.14 in the recording process. Explain how a ledger and E2.3 posting help in the recording Q2. Prepare a trial balance.12 Expand Your Critical Thinking Financial Reporting Real-World Focus Comparative Analysis Communication All About You (For Instructor Use Only) Communication Ethics Case Decision Making Ethics Case Considering P, P, Across the and P Organization Real-World 2-5 Downloaded by K? Quân Nguy?n (kyquan0306@gmail.com) lOMoARcPSD|8199826 ANSWERS TO QUESTIONS 1. A T-account has the following parts: (a) the title, (b) the left or debit side, and (c) the right or credit side.
The terms debit and credit mean left and right respectively. Pete is incorrect. The double-entry system merely records the dual effect of a transaction on the accounting equation. A transaction is not recorded twice; it is recorded once, with a dual effect.
Melissa is incorrect. A debit balance only means that debit amounts exceed credit amounts in an account. Conversely, a credit balance only means that credit amounts are greater than debit amounts in an account. Thus, a debit or credit balance is neither favorable nor unfavorable.
(a) Asset accounts are increased by debits and decreased by credits. (b) Liability accounts are decreased by debits and increased by credits. (c) Revenues and share capital are increased by credits and decreased by debits. Expenses and dividends are increased by debits and decreased by credits.
(a) Accounts Receivable—debit balance. (b) Cash—debit balance. (c) Dividends—debit balance. (d) Accounts Payable—credit balance.
(e) Service Revenue—credit balance. (f) Salaries and Wages Expense—debit balance. (g) Share Capital—Ordinary—credit balance. (a) Accounts Receivable—asset—debit balance.
(b) Accounts Payable—liability—credit balance (c) Equipment—asset—debit balance. (d) Dividends—equity—debit balance. (e) Supplies—asset—debit balance. (a) Debit Supplies and credit Accounts Payable.
(b) Debit Cash and credit Notes Payable. (c) Debit Salaries and Wages Expense and credit Cash. (1) Cash—both debit and credit entries. (2) Accounts Receivable—both debit and credit entries.
(3) Dividends—debit entries only. (4) Accounts Payable—both debit and credit entries. (5) Salaries and Wages Expense—debit entries only. (6) Service Revenue—credit entries only.
The basic steps in the recording process are: (1) Analyze each transaction for its effect on the accounts. (2) Enter the transaction information in a journal. (3) Transfer the journal information to the appropriate accounts in the ledger. 2-6 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) Downloaded by K? Quân Nguy?n (kyquan0306@gmail.com) lOMoARcPSD|8199826 Questions Chapter 2 (Continued) 11.
The advantages of using the journal in the recording process are: (1) It discloses in one place the complete effects of a transaction. (2) It provides a chronological record of all transactions. (3) It helps to prevent or locate errors because the debit and credit amounts for each entry can be easily compared. (a) The debit should be entered first.
(b) The credit should be indented. When three or more accounts are required in one journal entry, the entry is referred to as a compound entry. An example of a compound entry is the purchase of equipment, part of which is paid for with cash and the remainder is on account. (a) No, debits and credits should not be recorded directly in the ledger.
(b) The advantages of using the journal are: 1. It discloses in one place the complete effects of a transaction. It provides a chronological record of all transactions. It helps to prevent or locate errors because the debit and credit amounts for each entry can be easily compared.
The advantage of the last step in the posting process is to indicate that the item has been posted. 7,000 Share Capital—Ordinary. (a) The entire group of accounts maintained by a company, including all the asset, liability, and equity accounts, is referred to collectively as the ledger. (b) A chart of accounts is a list of accounts and the account numbers that identify their location in the ledger.
The chart of accounts is important, particularly for a company that has a large number of accounts, because it helps organize the accounts and define the level of detail that a company desires in its accounting system. Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) 2-7 Downloaded by K? Quân Nguy?n (kyquan0306@gmail.com) lOMoARcPSD|8199826 Questions Chapter 2 (Continued) 18. A trial balance is a list of accounts and their balances at a given time. The primary purpose of a trial balance is to prove (check) that the debits equal the credits after posting.
A trial balance also facilitates the discovery of errors in journalizing and posting. In addition, it is useful in preparing financial statements. No, Victor is not correct. The proper sequence is as follows: (b) Business transaction occurs.
(c) Information entered in the journal. (a) Debits and credits posted to the ledger. (e) Trial balance is prepared. (d) Financial statements are prepared.
(a) The trial balance would balance. (b) The trial balance would not balance. The normal balances are Cash debit, Accounts Payable credit, and Interest Expense debit. 2-8 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) Downloaded by K? Quân Nguy?n (kyquan0306@gmail.com) lOMoARcPSD|8199826 SOLUTIONS TO BRIEF EXERCISES BRIEF EXERCISE 2.1 (a) (b) (c) Debit Credit Normal Effect Effect Balance 1.
Accounts Payable Decrease Increase Credit 2. Advertising Expense Increase Decrease Debit 3. Service Revenue Decrease Increase Credit 4. Accounts Receivable Increase Decrease Debit 5.
Share Capital—Ordinary Decrease Increase Credit 6. Dividends Increase Decrease Debit BRIEF EXERCISE 2.2 Account Debited Account Credited June 1 Cash Share Capital—Ordinary 2 Equipment Accounts Payable 3 Rent Expense Cash 12 Accounts Receivable Service Revenue BRIEF EXERCISE 2. 5,000 Share Capital—Ordinary. 400 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) 2-9 Downloaded by K? Quân Nguy?n (kyquan0306@gmail.com) lOMoARcPSD|8199826 BRIEF EXERCISE 2.4 The basic steps in the recording process are: 1.
Analyze each transaction. In this step, business documents are examined to determine the effects of the transaction on the accounts. Enter each transaction in a journal. This step is called journalizing and it results in making a chronological record of the transactions.
Transfer journal information to ledger accounts. This step is called posting. Posting makes it possible to accumulate the effects of journalized transactions on individual accounts.5 (a) Effect on Accounting Equation (b) Debit-Credit Analysis Aug. 1 The asset Cash is increased; the Debits increase assets: equity account Share Capital— debit Cash R$9,000.
Ordinary is increased. Credits increase equity: credit Share Capital—Ordinary R$9,000. 4 The asset Prepaid Insurance is Debits increase assets: increased; the asset Cash is debit Prepaid Insurance R$2,100. Credits decrease assets: credit Cash R$2,100.
16 The asset Cash is increased; the Debits increase assets: revenue Service Revenue is debit Cash R$3,600. Credits increase revenues: credit Service Revenue R$3,600. 27 The expense Salaries and Wages Debits increase expenses: Expense is increased; the asset debit Salaries and Wages Expense Cash is decreased. Credits decrease assets: credit Cash R$1,000.
2-10 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) Downloaded by K? Quân Nguy?n (kyquan0306@gmail.com) lOMoARcPSD|8199826 BRIEF EXERCISE 2. 9,000 Share Capital—Ordinary. 3,600 27 Salaries and Wages Expense.7 Cash Service Revenue 5/12 4,200 5/5 5,400 5/15 3,000 5/15 3,000 Ending Bal. 8,400 Accounts Receivable 5/5 5,400 5/12 4,200 Ending Bal.8 Cash Date Explanation Ref.
Debit Credit Balance May 12 J1 4,200 4,200 15 J1 3,000 7,200 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) 2-11 Downloaded by K? Quân Nguy?n (kyquan0306@gmail.com) lOMoARcPSD|8199826 BRIEF EXERCISE 2.8 (Continued) Accounts Receivable Date Explanation Ref. Debit Credit Balance May 5 J1 5,400 5,400 12 J1 4,200 1,200 Service Revenue Date Explanation Ref. Debit Credit Balance May 5 J1 5,400 5,400 15 J1 3,000 8,400 BRIEF EXERCISE 2.9 AMARO COMPANY Trial Balance June 30, 2020 Debit Credit Cash. $ 8,100 Share Capital—Ordinary.
10,000 Salaries and Wages Expense. 1,000 $33,100 $33,100 2-12 Copyright © 2019 WILEY Weygandt Financial Accounting, IFRS, 4/e, Solutions Manual (For Instructor Use Only) Downloaded by K? Quân Nguy?n (kyquan0306@gmail.com) lOMoARcPSD|8199826 BRIEF EXERCISE 2. Trial Balance December 31, 2020 Debit Credit Cash. £ 3,000 Unearned Service Revenue.
2,200 Share Capital—Ordinary. 25,400 Salaries and Wages Expense. 2,400 £39,600 £39,600 SOLUTIONS FOR DO IT! EXERCISES DO IT! 2.