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29 April, 20:55

Exercise 2-10A Record transactions (LO2-4) Sun Devil Hair Design has the following transactions during the month of February.

(1) February 2 Pay $700 for radio advertising for February.

(2) February 7 Purchase beauty supplies of $1,300 on account.

(3) February 14 Provide beauty services of $2,900 to customers and receive cash.

(4) February 15 Pay employee salaries for the current month of $900.

(5) February 25 Provide beauty services of $1,000 to customers on account.

(6) February 28 Pay utility bill for the current month of $300.

Records each transaction

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Answers (2)
  1. 29 April, 22:06
    0
    Record transactions means to record the ledger entries

    Explanation:

    Proper understanding of the Double Entry Principle is important, it says that "For every Debit entry there must be a corresponding credit entry and vice versa"

    It is also important to note that Debit the Receiver and Credit the giver - this is how transactions are recorded, understanding who is giving the money and who is receiving it.

    Sun Devil Hair Design

    Feb 2nd Dr Advertisement Account $700 and Cr Bank $700

    Being advertising paid for the month of February

    Feb 7th Dr Purchases Account $1,300

    Cr Trade Creditor $1,300

    Being purchases bought on credit

    Feb 14th Dr Cash Account $2900

    Cr Customers Account $2,900

    Being cash sales

    Feb 15 Dr Salaries $900

    Cr Cash $900

    Being salaries paid for the month of February

    Feb 25 Dr Trade Receivables $1000

    Cr Credit Sales $1000

    Being goods bought on credit

    Feb 28th Dr Utility $300

    Cr cash $300

    Being utility paid in cash

    Note: It is important to include narrations of transactions that way any user of the account understands the transactions that have taken place
  2. 29 April, 23:09
    0
    (1) February 2 Pay $700 for radio advertising for February.

    Debit Advertising expense (p/l) $700

    Credit Cash account $700

    (2) February 7 Purchase beauty supplies of $1,300 on account.

    Debit Beauty supplies $1,300

    Credit Cash account $1,300

    (3) February 14 Provide beauty services of $2,900 to customers and receive cash.

    Debit Cash account $2,900

    Credit Revenue services $2,900

    (4) February 15 Pay employee salaries for the current month of $900.

    Debit Salaries expense $900

    Credit Cash account $900

    (5) February 25 Provide beauty services of $1,000 to customers on account.

    Debit Accounts receivable $1,000

    Credit Revenue services $1,000

    (6) February 28 Pay utility bill for the current month of $300.

    Debit Utility expense $300

    Credit Cash account $300

    Explanation:

    Expenses usually have debit balances, revenue credit balances.

    The receipt of cash is a debit entry to the account while the payment of cash is a credit entry to the cash account.

    Where cash is not paid to the entry that provides a service, a receivable is recorded.
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