Homework Questions Part 1
- Why do we have double-entry accounting in our U.S. system of GAAP?
- 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 debit and credit (e.g., asset, cash, accounts payable, equipment, revenue, etc.).
- Create a journal entry and a T-Account for each of the following transactions (review the applicable textbook chapter) :
- $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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