1. The chart of accounts for Lara Landscaping is as follows:

Assets		Revenue
111	Cash	411	Income from Services
112	Accounts Receivable
114	Prepaid Insurance	Expenses
121	Equipment	511	Wages Expense
122	Truck	512	Truck Operating Expense
		513	Rent Expense
Liabilities		514	Utilities Expense
211	Accounts Payable	515	Supplies Expense
Owner's Equity
311	J. Lara, Capital
312	J. Lara, Drawing

Lara Landscaping completed the following transactions in July 2015:

July 2	Paid rent for the month of July, $580.
7	Received cash on account from Java Condos, $218 (previously billed).
9	Bought equipment on account from Bray Equipment, $610.
12	Received and paid telephone bill, $95.
15	Billed City Hall for services performed, $310.
20	Paid cash for liability insurance (six months), $350.
21	J. Lara invested in the business her personal equipment having a fair market value of $495.
23	Paid $200 on account to Bray Equipment.
31	Paid wages to part-time employee, $248.
31	Received cash for services performed, $723.
31	J. Lara withdrew cash for personal use, $515.

Instructions:

Journalize the transactions for July in the following general journal per each date.

ANS:

GENERAL JOURNAL					PAGE
Date		Description	Post. Ref.	Debit		Credit
2015
July	2
	7
	9
	12
	15
	20
	21
	23
	31
	31
	31

2. The ledger of Alex Advertising and Publicity contained the following account balances as of October 31, 2015:

Accounts Payable	$2,450
Accounts Receivable	4,260
Advertising Revenue	9,640
C. D. Alex, Capital	7,650
C. D. Alex, Drawing	5,620
Cash	1,600
Equipment	5,240
Miscellaneous Expense	170
Prepaid Insurance	360
Public Relations Revenue	4,250
Rent Expense	900
Salary Expense	5,200
Supplies Expense	400
Utilities Expense	240

Instructions:

Prepare a trial balance dated October 31, 2015.

ANS:

Alex Advertising and Publicity Trial Balance October 31, 2015
Account Name	Debit	Credit
Total

3. Put appropriate accounts under each item of Accounting Equation referring the boxes below.

Assets	=	Liabilities	+	Owners Equity		Revenues	-	Expenses

Accounts: Accounts Payable, Capital, Sales Income, Wage Expenses, Cash, Inventory, Accounts Receivable, Interest Income, Professional Fee Expenses, Utility Expenses, Rental Expenses, Notes Payable, Prepaid Insurance, Notes Receivables, Equipment, Drawing, Advertising Expenses, Interest Expenses, Insurance Expenses

4. Please circle Dr. or Cr. for each transaction.

(1) Receipt of Cash for Service Cash (Dr. or Cr.), Service Income (Dr. or Cr.)

(2) Payment of Utility Bill Cash (Dr. or Cr.), Utility Expense (Dr. or Cr.)

(3) Purchase Equipment on account Equipment (Dr. or Cr.), Accounts Payable (Dr. or Cr.)

(4) Receipt for Accounts Receivable Cash (Dr. or Cr.), Accounts Receivable (Dr. or Cr.)

(5) Additional cash investment by the owner Cash (Dr. or Cr.), Capital (Dr. or Cr.)

(6) Purchase of Insurance for Two Years Cash (Dr. or Cr.), Prepaid Insurance (Dr. or Cr.)

(7) Decrease in Prepaid Insurance Prepaid Insurance (Dr. or Cr.), Insurance Expense (Dr. or Cr.)

(8) Withdrawal of investment by the owner Cash (Dr. or Cr.), Drawing (Dr. or Cr.)

(9) Purchase of Inventory Cash (Dr. or Cr.), Inventory (Dr. or Cr.)

(10) Payments for Accounts Payable Cash (Dr. or Cr.), Accounts Payable (Dr. or Cr.)

5. Please answer the following questions.

(1) What is prepaid insurance?

(2) What do you have to do after journalizing?

(3) Does an increase in expenses increase the Owners Equity or decrease it?

(4) What is the double-entry bookkeeping system?

(5) What is the General Ledger?