Question

The chart of accounts used by Norton Printing Company is listed below.

You are to indicate the proper accounts to be debited and credited for the following transactions by writing the account number(s) in the appropriate boxes.
CHART OF ACCOUNTS
1 Cash 8 Common Stock
2 Accounts Receivable 9 Retained Earnings
3 Paper Supplies 10 Dividends
4 Copy Machines 11 Service Revenue
5 Accounts Payable 12 Advertising Expense
6 Note Payable 13 Rent Expense
7 Unearned Revenue
Number(s) Number(s)
of account(s) of account(s)
debited credited
1. Stockholders invest $90,000 cash to start the business.
2. Purchased three digital copy machines for $400,000, paying $100,000 cash and signing a 5-year, 6% note for the remainder.
3. Purchased $5,000 paper supplies on credit.
4. Cash received for photocopy services amounted to $7,000.
5. Paid $500 cash for radio advertising.
6. Paid $800 on account for paper supplies purchased in transaction 3.
7. Dividends of $1,500 were paid to stockholders.
8. Paid $1,200 cash for rent for the current month.
9. Received $2,000 cash advance from a customer for future copying.
10. Billed a customer for $450 for photocopy services completed.

Answer 1

Transactions affecting the chart of accounts for Norton Printing Company involve crediting and debiting financial accounts such as Cash, Common Stock, Accounts Payable, and Service Revenue, among others based on activities like investments, purchases, service payments, dividends, and advances.

Step-by-step explanation:

The chart of accounts for Norton Printing Company includes various accounts that will be impacted by different transactions. The chart shows assets, liabilities, equity, revenue, and expenses accounts among others. Here's how each transaction would affect the chart of accounts, matching the debits and credits as per accounting principles:

1. Common Stock is credited when stockholders invest cash into the business, corresponding with a debit to Cash.
2. To purchase copy machines, 'Copy Machines ' is debited for the total value of the machines, with Cash debited for the portion paid and Note Payable credited for the remaining balance.
3. When paper supplies are bought on credit, 'Paper Supplies' is debited and Accounts Payable is credited.
4. Cash is debited when cash is received for services, with Service Revenue being credited.
5. For radio advertising, Advertising Expense is debited and Cash is credited when the payment is made.
6. Paying on account for paper supplies involves debiting Accounts Payable and crediting Cash.
7. When dividends are paid, ' Dividends' is debited and Cash is credited.
8. Paying rent involves a debit to Rent Expense and a credit to Cash.
9. Receiving a cash advance for future services leads to a debit in Cash and a credit to Unearned Revenue.
10. When services are billed to a customer, Accounts Receivable is debited and Service Revenue is credited.

Answer 2

Indication of accounts to be debited and credited:

Transaction Number(s) Number(s)

of account(s) of account(s)

debited credited

1. 1 8

2. 4 1 and 6

3. 3 5

4. 1 11

5. 12 1

6. 5 1

7. 10 1

8. 13 1

9. 1 7

10. 2 11

Step-by-step explanation:

a) Data:

CHART OF ACCOUNTS

1 Cash 8 Common Stock

2 Accounts Receivable 9 Retained Earnings

3 Paper Supplies 10 Dividends

4 Copy Machines 11 Service Revenue

5 Accounts Payable 12 Advertising Expense

6 Note Payable 13 Rent Expense

7 Unearned Revenue

b) The Chart of Accounts is a list of the Assets, Liabilities, Equity, Revenue, and Expense accounts that an organization uses to record its business transactions. They accumulate and summarize business transactions, making them reportable in good accounting formats.