Question

The transactions of the Riverbed Store are recorded in the general journal below. Account Titles and Explanation Debit Credit Date 2022 Aug 5 2,500 2,500 10 3,600 3,600 Accounts Receivable Service Revenue Cash Service Revenue Rent Expense Cash Cash Accounts Receivable 19 1,600 1,600 25 1.600 1,600 You are to post the journal entries to T-accounts and compute the August 31, 2022 balances. (Post entries in the order of journal entries in the question.) Cash V Service Revenue Accounts Receivable

Answer 1

Cash and Accounts Receivable is an asset and it increases when debited and decreases when credited. Therefore the transaction will reflect as follows :

• Cash a/c :

Increase by 3600 on August 10.

Decreases by 1600 on August 19.

Increase by 1600 on August 25.

Net amount that will reflect is 3600 Debit

• Accounts receivable a/c :

It increases by 2500 on August 5

Decreases by 1600 on August 25

Net will be 900 Debit.

Service revenue is a revenue (Sales account). It increases when credited and decreases when debited. August 5 and August 10 are credit and Cash sale respectively.

• Service revenue :

Increase on August 5 and August 10 by 2500 and 3600 respectively.

Net will be 6100 credit.