Question

8. The total debits in the Account Payable T-account are $1,100 and the total credits are $2,000. (be sure to indicate if it is a Calculate the balance in the Account Payable account credit or debit balance) 9. XYZ Services received $300 from a customer on 3/1/20 for services to be performed in the future. What effect (if any) does this transaction have on the assets, liabilities, and equity of XYZ Services (do not provide the journal entry in your answer)? 10. XYZ Services needs to accrue a $200 expense on 12/31/19. The expense will be paid in 2020. What effect (if any) does accruing the expense on 12/31/19 the have on the assets, liabilities, and equity of XYZ Services (do not provide the adjusting entry in your answer)? 11. XYZ Services needs to accrue $200 of interest revenue on 12/31/19. They will receive the interest in 2020. What effect (if any) does it have on the income statement and balance sheet of XYZ Services if they do not make the adjusting entry on 12/31/19?

Answer 1

Solution 8 Computation of balance in the accounts payable Particulars Total Credit in the accounts payable accounts Less: Total debit in the accounts payable accounts Credit balance in the accounts payable Amount $ $ $ 2,000 1,100 900 Solution 9 Assets=Liabilities + Equity $300=$300+$0 Hence Assets(Bank A/c) will increase by $300 & Liability side (Unearned revenue) will also increase by $300 Solution 10 Assets Liabilities + Equity So=$200-$200 Hence Liability side (Provision for expenses) will increase by $200 & Equity (Retained earnig) will decrease by $200

Solution 11 Assets-Liabilities + Equity $200=$0-$200 Balance sheet Hence Assets(Interest accrued) will be understated by $200 &Equity side (Retained earning) will also be understated by $200. Income statement Hence the other income section will be understated by $200.