PAID CASH FOR INSURANCE Lesson 4 2 (GJ) PAID CASH FOR INSURANCE August 4. Paid cash for insurance, $1,200.00. Check No. 2. Cash Prepaid Insurance 1. Which accounts are affected? Prepaid Insurance Cash Debit Normal Balance 1,200.00 2. How is each account classified? Prepaid Insurance is as asset account. Cash is as asset account.  3. How is each classification changed? Assets are increased. Assets are decreased. Debit Normal Balance 1,200.00  4. How is each amount entered in the accounts? Assets increase on the debit side. Assets decrease on the credit side. Lesson 4-2, page 72

BOUGHT SUPPLIES ON ACCOUNT Lesson 4 2 (GJ) BOUGHT SUPPLIES ON ACCOUNT August 7. Bought supplies on account from Ling Music Supplies, $2,720.00. Memorandum No.1. Accounts Pay.—Ling Music Supplies Supplies 1. Which accounts are affected? Supplies Accounts Payable—Ling Music Supplies Debit Normal Balance 2,720.00 2. How is each account classified? Supplies is an asset account. Accounts Payable—Ling Music Supplies is a liability account.  Credit Normal Balance 3. How is each classification changed? Assets are increased. Liabilities are increased. 2,720.00  4. How is each amount entered in the accounts? Assets increase on the debit side. Liabilities increase on the credit side. Lesson 4-2, page 73

BOUGHT SUPPLIES ON ACCOUNT August 7. Bought supplies on account from Ling Music Supplies, $2,720.00. Memorandum No.1. 2 4 1 3 1. Write the date. 2. Debit Supplies. 3. Credit Accounts Payable—Ling Music Supplies. 4. Write the source document number. Lesson 4-2, page 73

PAID CASH ON ACCOUNT August 11. Paid cash on account to Ling Music Supplies, $1,360.00, Check No. 3. Cash Accts. Pay.—Ling Music Supplies 1. Which accounts are affected? Accounts Payable—Ling Music Supplies Cash 1,360.00 Credit Normal Balance  2. How is each account classified? Accts. Pay.—Ling Music Supplies is a liability account. Cash is an asset account. 3. How is each classification changed? Liabilities are decreased. Assets are decreased. Debit Normal Balance 1,360.00  4. How is each amount entered in the accounts? Liabilities decrease on the debit side. Assets decrease on the credit side. Lesson 4-2, page 74

PAID CASH ON ACCOUNT August 11. Paid cash on account to Ling Music Supplies, $1,360.00, Check No. 3. 4 2 1 3 1. Write the date. 2. Debit Accounts Payable—Ling Music Supplies. 3. Credit Cash. 4. Write the source document number. Lesson 4-2, page 74