Understanding Equity, Charts of Accounts, and Normal Balances in

School: Paradise Valley Community College - Course: ACC 111 - Subject: Accounting

What is equity?List the four equity accounts and describe their normal balances. In your own words, what is achart of accounts? In your own words, what is aledger? S-F:2-1 Identifying accounts Consider the following accounts and identify each account as an asset (A), liability (L), or equity (E). a.Notes Receivable b.Nunez, Capital c.Prepaid Insuranced.Notes Payable e.Rent Revenue f.Taxes Payable g.Rent Expense h.Furniture i.Nunez, Withdrawals j.Unearned RevenueE-F:2-11 Creating a chart of accounts Raymond Autobody Shop has the following accounts:. Accounts PayableService Revenue CashEquipmentUtilities ExpenseRaymond, Capital Automotive SuppliesAdvertising Expense Raymond, WithdrawalsUnearned Revenue Page 12Equit y LIABILI TY ASS ET Equit y LIABILI TY ASS ET Equit y LIABILI TY ASS ET Equit y Owners capital owners with drawals Revenue ·Expenses organizedlistingof all accounts for a company. Bookwitha page to eachaccount,all accounts current balances LR AA EAOF E OF↓

Create a chart of accounts for Raymond Autobody Shop using the standard numbering system. Each account is separated by 10s. For example, the first asset account will be 100 and the next asset account will be 110. AssetsEquity Revenues Liabilities Expenses Learning Objective 2. Define debits, credits, and normal account balances using double-entry accounting and T-accounts. What is double entry accounting? In the T-account below, label which side is the debit side and which side is the credit side. Fill in the expanded accounting equation with Debit (DR), Credit (CR), and Increase (Inc.) and Decrease (Dec.). Assets=Liabilities+Equity Assets=Liabilities+Owner, Captial-Owner, Withdrawals+Revenues-Expenses Fill in the normal balance for each of the accounts: Account typeNormal Balance AssetDebit Expenses Owner, Withdrawals Liabilities Revenues Owner, CapitalDetermine the balance in the following T-account Cash 25,0001,000 2,0003,000 Page 13 (0E) 100 Cash 300Raymond, Capital 110Automotive supplies 310 Raymond, withdraws 120 Equipment400 serviceRevenue 200Accountspayable210unearnedRevenue 300Utilities Expense 310 Advertising Expense Alwaysuse atleasttwoaccounts, andtheymust be balanced. Account Name Debitis on the left! c =3(2=D creditis on the Right! IDR) (CR) Assets Liabilities ownerscapital- Ownerwithdrawals +Revenues - Expenses ** ↓ M↓↑ ↑ ↓ ↓ N↑ ↓ Normal Normal Normal Normal NormalNormal Balance Balance Balance Balance Balance Balance TACCOUNT Ledgerexample CASH DATE DEBIT CREDIT BALANCE 12 10,000 10,000 Debit 15 3,0003,000 Debit credit credit credit Accounts Payable 1,00025,000 3,000 2,000 Balance23,000 23,000 Balance Debits credits (25,000+ 2,000) (1,000+ 3,000) 27,000 4,000 =23,000indebits