accounting 316

1/ Why do we have double-entry accounting in our U.S. system of GAAP?

2/ In a capital account, explain which side (debit or credit) will decrease and which side will increase. Provide an example (just make one up) of a transaction with a T-account for each side of the transaction showing which type of accounts will receive the debt and credit (e.g., asset, cash, accounts payable, equipment, revenue, etc.).

3/ Create a journal entry and a T-Account for each of the following transactions (review the applicable textbook chapter and, if necessary, the optional debits/credits PowerPoint presentation and the YouTube videos) :

$15,000 worth of equipment is purchased on credit.

$40,000 of patient bills from last year are collected in cash.

$10,000 is received from a managed care company for services to be rendered next year for members

$20,000 worth of supplies is purchased and paid for in cash.

$5,000 of accounts payable is paid in cash.

$30,000 of cash is received from taking out a note with the local bank.

$10,000 of accounts receivable from last year is received in cash.

Why do organizations prepare cash flow statements and operating statements?

$7,000 is paid back on the borrowed note.

4/ Why do organizations prepare cash flow statements and operating statements?

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