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Flashcards in Journal Entries Deck (26)
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Establish allowance for doubtful accounts and write-off account.

Dr. Bad debt expense
Cr. Allowance for doubtful accounts

Write off:
Dr. Allowance for doubtful accounts
Cr. Accounts receivable


Sell an asset for a loss and sell an asset for a gain.

Dr. Accumulated depreciation
Dr. Loss
Dr. Cash
Cr. Equipment (at book value)
Dr. Accumulated depreciation
Dr. Cash
Cr. Equipment (at book value)
Cr. Gain


Cash dividend declared and paid.

Dr. Dividends
Cr. Dividends payable
Dr. Dividends payable
Cr. Cash


Closing revenue, expense, and dividend entries.

Close revenue:
Dr. Revenue
Cr. Income summary
Close expense accounts:
Dr. Income summary
Cr. Each expense account
Close income summary to retained earnings:
Dr. Income summary
Cr. Retained earnings
Close dividends:
Dr. Retained earnings
Cr. Dividends


Collect on accounts receivable.

Collect on A/R:
Dr. Cash
Cr. Accounts receivable


Purchase asset with cash and note payable.

To record purchase:
Dr: Land/Equipment
Cr. Cash
Cr. Note payable


Record annual depreciation expense.

Record annual depreciation expense:
Dr. Depreciation expense
Cr. Accumulated depreciation.


Record receipt of dividend income.

Receive dividend income:
Dr. Cash
Cr. Dividend income


Record accrued expense.

Record accrued expense:
Dr. Expense
Cr. Payable


Purchase and yearly adjustment of available for sale securities.

Dr. Available for sale securities
Cr. Cash
Record loss at year end:
Dr. Unrealized loss - OCI
Cr. Available for sale securities
Record gain at year end:
Dr: Available for sale securities
Cr. Unrealized gain - OCI


Investment in bonds at a discount, interest received, and redemption of bonds.
(Assume: five $1000, 5%, 3-year bonds at 97, semi-annual interest, straight-line)

Dr: Investment in bonds 4,850
Cr: Cash 4,850
Interest received:
Dr: Cash 125
Dr: Investment in bonds 25
Cr: Interest income 150
(5,000 x .05 x 6/12 months)
($150 x 6 months / 36 months)
Dr: Cash 5,000
Cr: Investment in bonds 5,000


Investment in bonds at a premium, interest received, and redemption of bonds.
(Assume: five $1000, 5%, 3-year bonds at 106, semi-annual interest, straight-line)

Dr: Investment in bonds 5,300
Cr: Cash 5,300
Interest received:
Dr: Cash 125
Cr: Investment in bonds 50
Cr: Interest income 75
($5,000 x .05 x 6/12 months)
($300 x 6 months / 36 months)
Dr: Cash 5000
Cr: Investment in bonds 5,000


Equity method investment purchase, net income, and dividends (Assume 25% stake, $10,000 net income and $1,000 in dividends)

Initial investment:
Dr: Investment in investee
Cr: Cash
Year-end share of net income
Dr: Investment in investee 2,500
Cr: Investment income 2,500
Share of dividends:
Dr: Cash 1,000
Cr: Investment in investee 1,000


Investment in trading securities and year-end adjustments

Initial purchase:
Dr: Trading securities
Cr: Cash
Year-end loss:
Dr: Unrealized loss on investment (to net income)
Cr: Trading securities
Year-end gain:
Dr: Trading securities
Cr: Unrealized gain on investments (to net income)


Issue par value stock
(3,000 shares, $1 par, at $5 per share)

Dr: Cash 15,000,000
Cr: Common stock 3,000,000
Cr: Additional paid-in capital 12,000,000


To record purchase of direct materials and job costing, including direct labor and overhead.

To record purchase:
Dr: Raw materials inventory
Cr: Accounts payable
To transfer raw materials to productions:
Dr: WIP inventory
Cr: Raw materials inventory
Cr: Salaries payable
Cr: Overhead
To transfer completed units to inventory:
Dr: Finished goods inventory
Cr: WIP inventory


To record loan payable, interest accrual, and repayment.
(Assume $100,000 at 6% per year, principal and interest due end of year 2)

To record receipt:
Dr: Cash 100,000
Cr: Loan payable 100,000
To record accrued interest:
Dr: Interest expense 3,000
Cr: Interest payable 3,000
To record repayment:
Dr: Interest expense 6,000
Dr: Interest payable 3,000
Cr: Cash 109,000


To pay accounts payable

To pay accounts payable:
Dr: Accounts payable
Cr: Cash


To record payroll

To record payroll:
Dr: Salaries Expense
Cr: Federal income tax payable
Cr: State income tax payable
Cr: Social security payable
Cr: Medicare payable
Cr: Cash
To record employer portion:
Dr: Payroll tax expense
Cr: Social Security payable
Cr: Medicare payable
Cr: FUTA payable
Cr: SUTA payable


Record purchase and sale of inventory in perpetual environment.

Record purchase:
Dr: Inventory
Cr: Accounts payable
Record sale:
Dr: Accounts Receivable
Dr: Cost of goods sold
Cr: Inventory
Cr: Sales


To record purchases and purchase returns

To record purchased inventory on account:
Dr: Purchases
Cr: Accounts payable
To record return of defective inventory to vendor:
Dr: Accounts payable
Cr: Purchase returns & allowances


To record prepaids

To record prepayment (example rent):
Dr: Prepaid rent
Cr: Cash
To record adjustment (example rent):
Dr: Rent expense
Cr: Prepaid rent


To account for warranties

To record sale:
Dr: Cash
Cr: Sales
To record expense accrual:
Dr: Warranty expense
Cr: Warranty liability
To record warranty repair:
Dr: Warranty liability
Cr: Cash


Unearned revenue and adjustments

To record unearned revenue:
Dr: Cash
Cr: Unearned revenue
To reflect earned revenue:
Dr: Unearned revenue
Cr: Revenue


To record large stock dividend issuance (50% stock dividend)
(1,000,000 assumed shares outstanding x 50% x $1 par)

Record issuance:
Dr: Retained earnings 500,000
Cr: Common stock 500,000


To record small stock dividend (5% stock dividend, 2,300,000 x 5% x $5 per share market price, $1 par value)

Record issuance:
Dr: Retained earnings 575,000
Cr: Common stock 115,000
Cr: Paid in capital in excess of par 460,000