The chart of accounts used by Norton Printing Company is listed below. You are to indicate the proper accounts to be debited and credited for the following transactions by writing the account number(s) in the appropriate boxes.
CHART OF ACCOUNTS
1 Cash 8 Common Stock
2 Accounts Receivable 9 Retained Earnings
3 Paper Supplies 10 Dividends
4 Copy Machines 11 Service Revenue
5 Accounts Payable 12 Advertising Expense
6 Note Payable 13 Rent Expense
7 Unearned Revenue
Number(s) Number(s)
of account(s) of account(s)
debited credited
1. Stockholders invest $90,000 cash to start the business.
2. Purchased three digital copy machines for $400,000, paying $100,000 cash and signing a 5-year, 6% note for the remainder.
3. Purchased $5,000 paper supplies on credit.
4. Cash received for photocopy services amounted to $7,000.
5. Paid $500 cash for radio advertising.
6. Paid $800 on account for paper supplies purchased in transaction 3.
7. Dividends of $1,500 were paid to stockholders.
8. Paid $1,200 cash for rent for the current month.
9. Received $2,000 cash advance from a customer for future copying.
10. Billed a customer for $450 for photocopy services completed.

Indication of accounts to be debited and credited:

Transaction         Number(s)        Number(s)

                           of account(s)    of account(s)

                           debited             credited

1.                             1                         8

2.                           4                         1 and 6

3.                           3                         5

4.                           1                         11

5.                         12                         1

6.                          5                         1

7.                         10                         1

8.                         13                         1

9.                          1                          7

10.                        2                         11

Explanation:

a) Data:

CHART OF ACCOUNTS

1 Cash                               8 Common Stock

2 Accounts Receivable   9 Retained Earnings

3 Paper Supplies           10 Dividends

4 Copy Machines           11 Service Revenue

5 Accounts Payable      12 Advertising Expense

6 Note Payable              13 Rent Expense

7 Unearned Revenue

b) The Chart of Accounts is a list of the Assets, Liabilities, Equity, Revenue, and Expense accounts that an organization uses to record its business transactions.  They accumulate and summarize business transactions, making them reportable in good accounting formats.

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