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    Activity 2

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    Ashley Timbreza Betita
    Rodrigo Lucena started a new business called Lucena Business Consultancy. He needs to set up a chart of accounts to track the business's finances. The document lists various asset, liability, revenue, and expense accounts that need to be included. It provides instructions to assign each account a three-digit number based on the type of account and indicates the order the accounts should appear in the ledger.

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    Activity 2

    Uploaded by

    Ashley Timbreza Betita
    43 views5 pages
    Rodrigo Lucena started a new business called Lucena Business Consultancy. He needs to set up a chart of accounts to track the business's finances. The document lists various asset, liability, revenue, and expense accounts that need to be included. It provides instructions to assign each account a three-digit number based on the type of account and indicates the order the accounts should appear in the ledger.

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    FOR EDUCATIONAL PURPOSES ONLY!!

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    Activity 2.Docx

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    Rodrigo Lucena started a new business called Lucena Business Consultancy. He needs to set up a chart of accounts to track the business's finances. The document lists various asset, liability, revenue, and expense accounts that need to be included. It provides instructions to assign each account a three-digit number based on the type of account and indicates the order the accounts should appear in the ledger.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    43 views5 pages

    Activity 2

    Uploaded by

    Ashley Timbreza Betita
    Rodrigo Lucena started a new business called Lucena Business Consultancy. He needs to set up a chart of accounts to track the business's finances. The document lists various asset, liability, revenue, and expense accounts that need to be included. It provides instructions to assign each account a three-digit number based on the type of account and indicates the order the accounts should appear in the ledger.

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    Activity – 2

    Developing A Chart of Accounts


    Rodrigo Lucena organized a new business named it Lucena
    Business Consultancy. Listed below are the accounts that will
    be needed in the ledger:
    Consulting Revenues Lucena, Widrawals
    Accounts Receivable Income Summary
    Building Office Supplies Expense
    Rent Expense Lucena, Capital
    Furniture and Fixtures Notes Payable
    Cash Prepaid Rent
    Land Interest Expense
    Miscellaneous Expense Salaries Expense
    Referral Revenues Unearned Consulting Revenue
    Accumulated Depreciation-Building Office Supplies
    Accumulated Depreciation – Fur.& Fix Interest Payable
    Depreciation Expense – Building Insurance Expense
    Depreciation Expense – Fur. & Fix. Accounts Expense

    Required:
    Arranged these accounts in the order in which they would appear in the ledger.
    Assign each account a number, using a three-digit numbering scheme: the 100
    series for assets, the 200 series for liabilities, etc. Use the second digit to
    indicate specific accounts within a major category; for example, Cash would be
    account number 110

    This study source was downloaded by 100000837532176 from CourseHero.com on 04-10-2022 08:56:30 GMT -05:00

    https://www.coursehero.com/file/86106154/ACTIVITY-2docx/
    Preparing a Trial Balance

    The accounts of Aristotle Go Advertising Agency follow with their normal


    balances as at December 31, 2015

    Accounts Balances
    Go, Capital 254,700
    Insurance Expense 9,600
    Accounts Payable 26,400
    Service Revenues 258,000
    Land 87,000
    Cash 21,000
    Salaries Expense 75,000
    Building 375,000
    Equipment Rentals Expense 15,000
    Go, Withdrawals 18,000
    Utilities Expense 30,000
    Accounts Receivable 28,500
    Notes Payable 135,000
    Supplies Expense 15,000

    Required: Prepare a Trial Balance

    This study source was downloaded by 100000837532176 from CourseHero.com on 04-10-2022 08:56:30 GMT -05:00

    https://www.coursehero.com/file/86106154/ACTIVITY-2docx/
    Effects of Errors on the Trial Balance

    Which of the following errors would cause a


    trial balance to have unequal totals? Explain
    you answers briefly, be able to state amount of
    the error, if any.

    a. A payment to a creditor was recorded as a


    debit to Accounts Payable for P12,900 and as
    credit to Cash for P10,200.

    b. A payment of P15,000 to a creditor for an


    account payable was debited to Accounts
    Receivable and credited to Cash.

    c. A purchase of office supplies of P42,000 in


    cash was recorded as a debit to Office Supplies
    for P4,200 and as credit to Cash foP4,200.

    d. A purchase of equipment for P45,000 in


    cash was recorded as a debit to Supplies for
    P45,000 and as a credit to Cash for P45,000
    This study source was downloaded by 100000837532176 from CourseHero.com on 04-10-2022 08:56:30 GMT -05:00

    https://www.coursehero.com/file/86106154/ACTIVITY-2docx/
    Effects of Errors on the Trial Balance

    The following errors occurred in posting transactions


    from the journal to the ledger:

    1. A payment of P1,700 for Advertising was posted as a


    P1,700 debit to advertising expense and a P7,100 credit
    to cash

    2. The receipt of P3,000 from a client on account was


    posted as a P3,000 debit to cash and a P3,000 credit to
    sales

    3. The purchase of supplies on account for P1,400 was


    posted twice as a debit to supplies and once as a credit
    to accounts payable.

    4. The payment of P2,200 to a creditor on account was


    posted as a credit to accounts payable for P2,200 and a
    credit to cash of P2,200

    For each these errors, determine the following:


    a. Is the trial balance out of balance?
    b. If out of balance, what is the difference between the
    column totals?
    c. Which column total is larger?

    This study source was downloaded by 100000837532176 from CourseHero.com on 04-10-2022 08:56:30 GMT -05:00

    https://www.coursehero.com/file/86106154/ACTIVITY-2docx/
    This study source was downloaded by 100000837532176 from CourseHero.com on 04-10-2022 08:56:30 GMT -05:00

    https://www.coursehero.com/file/86106154/ACTIVITY-2docx/
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