Chapter 4.2Debit and Credit Theory

Debit and Credit Theory 4.2

200

Transaction 1 The company purchases $200 of supplies from Packham Products to be paid for later.

Supplies

Assets Liabilities + Equity

A/P Packham Products200

$$ $$ $

Dr Cr

Debit and Credit Theory 4.2

500

Transaction 2 The company pays $500 to Dini Bros. in partial payment of the amount owed to them.

Cash

Assets Liabilities + Equity

A/P Dini Bros.500

$$

Cr Dr

$$

Debit and Credit Theory 4.2

200

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

Cash

Assets Liabilities + Equity

$

Dr

A/R—R. Van Loon

$$

Cr200

Debit and Credit Theory 4.2

400

Transaction 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.

Cash

Assets Liabilities + Equity

B. Rissien, Capital400

$$ $$ $

Dr Cr

Debit and Credit Theory 4.2

8 000

Transaction 5 A used truck costing $8 000 is purchased from Dini Bros. A cash down payment of $2 500 is made; the balance is to be paid later.

Truck A/P Dini Bros.5 500

Dr Cr

2 500

Cash

Cr

$$$ $$$

Assets Liabilities + Equity

Debit and Credit Theory 4.2

350

Transaction 6 A delivery service is provided for R. Van Loon customer at a price of $350. The customer agrees to pay within 60 days.

A/R—R. Van Loon

Assets Liabilities + Equity

B. Rissien, Capital350

$$ $$ $

Dr Cr

Debit and Credit Theory 4.2

650

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

Cash

Assets Liabilities + Equity

B. Rissien, Capital

650

$$

Cr Dr

$$