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Problem 6-3 Analyzing Transactions

Glenda Hohn recently started a day care center. She uses the following accounts to record business transactions.

General Ledger

    Cash in Bank

    Accts Rec.-Tiny Tots Nursery

    Office Furniture

    Passenger Van

    Accts. Pay-Acne Bus Services

    Glenda Hohn, Capital

    Glenda Hohn, Withdrawals

    Day Care Fees

    Utilities Expense

    Van Expense

Instructions

In your working papers or on a separate sheet of paper, for each transaction:

1. 1.Determine which accounts are being affected.
   

2. 2.Classify each account.
   

3. 3.Determine whether the accounts are being increased or decreased.
   

4. 4.Indicate which account is debited and which account is credited.
   

Transactions:

1. 1.Bought a passenger van for cash.
   

2. 2.Paid the telephone bill for the month.
   

3. 3.Received cash from customers for day care services.

Problem 6-2 Recording Business Transactions

Instructions: Shown below are the six steps for recording a business transaction in the general journal. In your working papers or on a blank sheet of paper, indicate the proper order of these steps.

1. A.Amount of the credit                                        Step #1
   

2. B.Name of the account credited                         Step #2 
   

3. C.Source document referenced                          Step #3
   

4. D.Date of the transaction                                    Step #4
   

5. E.Amount of the debit                                         Step #5
   

6. F.Name o the account debited                           Step #6