accounting FMGT1152 p19a BYP ab E23 p213 this are question

accounting FMGT1152

p1-9a , BYP a&b , E2-3, p2-13 this are question numbers in the picture which I need answers
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An accounting record where transactions are recorded in chronological (date) order Kobayashi Company has the following accounts E Identify type of account financial statement, and normal balance, Explain Account Type of Account Asset Financial Statement Balance Sheet Normal Balance Cash M. Kobayashi, Capital normal balances, do i ) C Accounts Payable Building Fees Earned Insurance Expense Interest Revenue M. Kobayashi, Drawings Notes Receivable Prepaid Insurance Rent Expense Supplies Instructions (a) Complete the table. Identify (1) the type of account as asset, liability, or owner\'s equity (for owner\'s equity accounts, also identify if it is a capital, drawings, revenue, or expense account): (2) what financial statement it is presented on; and (3) the normal balance of the account. The first one has been done for you as an example. (b) Explain why the normal balance for each of the different types of accounts is either a debit or credit. Refer to the accounting equation in your explanation.

Solution

Account balance Type of account Financial statement Normal balance Reference cash current asset balance sheet debit 1 M. kobayashi, capital non current liability balance sheet credit 2 Account payable current liability balance sheet credit 3 Building non current asset balance sheet debit 4 Fees earned revenue Income Statement credit 5 Insurance expense expense Income Statement debit 6 Interest revenue income (other income) Income Statement credit 7 M.kobayashi,drawings Drawings Account balance sheet debit 8 Notes recievable Current Liability balance sheet debit 9 prepaid insurance Current Asset balance sheet debit 10 rent expense expense Income Statement debit 11 suplies Current Asset balance sheet debit 12 Reference 1) cash account is a asset for the company , and when asset is increased it is debited. when cash is increased asset is increased , on other side capital is increased due increase in cash invested by proprietor. 2) M.kobyashi capital is the fund invested by the owner , so it is a liability of the entity repay the same , because this capital account is credited . capital invested will be increase in the business so automitically cash balance available in the entity is increased. 3) account payable is the liability of the entity , so it is credited to account . Payables are increased when goods are credited for credit so the inventory balance will increse in asset side and as the result of credit the payable balance will be incresed in liability side . 4) building is a noncurrent asset for businnes , it is carried out in the business to help in generte revenue . So when asset increase it is debited when building is acquired , asset is increased as this affect cash will be reduced or when asset is purchased for credi liability will be incease. 5) fees earned is a revenue to entity , when revenue is increased it is credited . when revenue eanred, cash will be increased or supplies will be increase and as the affect inventory is reduced by cost of inventory 6)insurance expense is a expense , when expense increased it is debited. when insurance is paid cash is reduced and capital is also reduced. 7) interest revenue is a income , so it is credited to income statement when interest earned asset is increased and capitala lso increased, 8) drawings account is the asset withdrawn by owner for his personal purpuse , so when drawings increased it is debited when drawings is made cash and capital is reduced 9) note recievable is a recievable balance so it asset balance and credited it will affect by increase in recievable and liability als increased 10) prepaid insurance is asset for entity since it is paid before due date , so that’s why it is debited when prepaid expense is happened, cash will be reduce and asse incresed in the name of prepaid expense 11)   rent expense it is a expense , so when expense incresed it is debited when rent is paid cash and capital is reduced 12) supplies is the supply made by the entity to its customers , so it is asset for business , so when aset increased it is debited when supplies are increased recievable balance is increased.