College Accounting homework help!!!?

Question

I am doing a general journal...and one of the trasnaction is "Paid Magic's Restaurant on account, $25,000" I always get stuck on this....what accounts do I debit and what do I credit......would it be....debit the Accounts Payable and Credit Food Expense? And if you need to know the account that I am working with please let me know.

but if you are paying off some of what you owe on account...wont you debit?

debit accounts payable that is..

thank you both so much!!

yes you are. again thank you very much! this class is one of my hardest class ever....its a real pain the the ***.....this helped alot thanks again!

Answer 1

Credit Accounts payable (it is a liability account, so it's a credit). The other side of the transaction is a debit to either food expense or if it's considered inventory (I don't know what kind of business it is. If they're buying something that they're selling & not just using it themselves it's inventory in the asset section) you would debit 'food purchased' (or whatever that account is called).

Yes, in answer to your additional details: If you are paying off the $25,000, then you will debit accounts payable for $25,000 and credit your bank account for $25,000. But when the question says 'paid ON ACCOUNT' I took that to mean that it is not paid yet, but was put on the bill that is to be paid as a payable later.

The concept of Assets and Expenses being debit accounts and Liabilities (what you owe) and Equity (income) being credit accounts means that INCREASES in amounts and positve balance occurs on that side. You can credit an asset account and debit a liability account, but it means the balance is decreasing. The reason you debit A/P when you pay it is you no longer owe it, so because you had a positive $25,000 in that account when you put it in on the credit side, by debiting it you're taking it out. I hope I'm making sense here.

Answer 2

College Accounting Help

Answer 3

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RE:
College Accounting homework help!!!?
I am doing a general journal...and one of the trasnaction is "Paid Magic's Restaurant on account, $25,000" I always get stuck on this....what accounts do I debit and what do I credit......would it be....debit the Accounts Payable and Credit Food Expense? And if you need to know the...

Answer 4

If you have a Food Expense account, it should be debited and credit Accounts payable. Just remember the accounting rule...Assets and expenses are debited when increased and credited when decreased. On the other hand, Liabilities, Capital and Revenues are credited when increased, and debited when decreased. As for your example, you incurred an expense and a liability. so to increase the expense, debit food expense and to increase liability, credit accounts payable. When you pay the accounts payable, you have to debit the accounts payable becasue it is decreased and credit cash (assets are credited when decreased).

Answer 5

Jerry trickett, maybe tire army officer, opened Trickett's Catering Service. has his accountant, analyze the transactions listed next and presented them in proper form.

A. the analyze of the transaction by using the expanded accounting equation.
B. a balance sheet showing the position of the firm before opening for business on March 31st 2014.
C. An income statement for the month of April.
D. a statement of owner's equity for April.
E. a balance sheet as of April 30, 2014

March 25th Jerry Trickett vested 45,000 dollars in catering business from his personal savings account.

March 27 he brought equipment for cash from small company for a 1,600
28 he bought additional equipment on account from Aiden company for 2,200
March 29 he paid $100 to Adien Co. as partial payment of the month 28 transaction
now it's asking me to prepare your balance sheet as much 31st 2014

April 1st catered a graduation and immediately collected cash, 1,900
April 5th paid salaries of employees, $700

Answer 6

help me