Question

For each source information shown below, prepare the appropriate journal entry. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.) a. Purchase order dated October 13 for massage chairs costing $835 and oil supplies costing $310. b. Remittance advice from customer for $107, received October 17. c. Receiving report indicating October 22 receipt of October 13 order. Also received supplier invoice totaling $1,145 d. NGS check for payment in full of October 13 order.

Answer 1

Journal entries include the receipt of a customer payment, receipt of inventory, and payment for inventory ordered, with one case requiring no journal entry (purchase order).

Step-by-step explanation:

The preparation of journal entries is a core function in accounting. Below are the journal entries for each source information provided:

a. Purchase order dated October 13 for massage chairs costing $835 and oil supplies costing $310: No Journal Entry Required. A purchase order is not an accounting transaction yet, as no goods have been received nor has any payment been made.

b. Remittance advice from customer for $107, received October 17:

Debit: Cash $107

Credit: Accounts Receivable $107

This entry records the receipt of cash from a customer, decreasing Accounts Receivable and increasing Cash.

c. Receiving report indicating October 22 receipt of October 13 order. Also received supplier invoice totaling $1,145:

Debit: Inventory $1,145

Credit: Accounts Payable $1,145

This entry records the receipt of inventory that has been ordered, increasing Inventory and Accounts Payable accordingly.

d. NGS check for payment in full of October 13 order:

Debit: Accounts Payable $1,145

Credit: Cash $1,145

This entry records the payment made for the purchase, decreasing Accounts Payable and Cash.