The Simple LedgerDebit and Credit Rules

Pacific Trucking.

• Let’s go through the Transactions

Pacific Trucking.

• 2. Company pays $200 to Dini Bros in partial payment of the amount owed to them.

• 3. The company receives $200 cash from R. Van Loon in partial payment of her debt.

• 4. A delivery service is provided for a customer at a price of $400. The customer pays cash at the time the service is completed.

Pacific Trucking.

• 5. A used truck costing $8000 is purchased from Dini Bros. A cash down payment of $2500 is made at the time of the purchase and the balance is to be paid at a later date.

• 6. A delivery service is completed for R. Van Loon at a price of $350. Van Loon does not pay for the service at the time it is provided, but agrees to pay within 30 days.

• 7. One of the lifting machines (part of equipment) breaks down. The company spends $650 cash to have the machine repaired.

Pacific Trucking

• After all the transactions, these arethe cash and capital T-accounts forPacific Trucking.

Double-Entry System of Accounting

• If your accounts do not balance after a transaction, you have DEFINITELY made an error.

• If your accounts do balance, it is PROBABLY correct, but not necessarily.

Board Exercises

• Fiona Siska is the owner-operator of a fitness clinic. The ledger used in her business contains the following accounts:-Cash-Accounts Receivable (several)-Supplies-Furniture-Equipment-Automobile-Accounts Payable (several)-Flora Siska, Capital

Board Exercises

• 1. The business receives $300 cash from J. Parker, one of the accounts receivable.

• 2. The business purchases $200 worth of supplies for cash.

• 3. Little Bros., one of the Accounts Payable, is paid $100.

• 4. The owner withdraws $250 for her personal use.

• 5. A new piece of equipment costing $500 is purchased from Champion Sports. The business pays $125 cash at the time of purchase, with the balance of $375 to be paid within 30 days.

• 6. A new customer signs up for a fitness course. The $300 fee is paid in cash.

Homework Exercises

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