Question

Please choose the options for the scenarios below based on the below information.

London Legal Company had the following transactions during the month of July 2011:

Date	Description
Jul 1	Earned $2,300 in cash for services provided
Jul 2	Paid $3,800 in advance for insurance coverage up to July 31, 2012
Jul 3	Charged $3,100 cash to customers for services performed
Jul 15	Customer paid $850 for services delivered last month
Jul 28	Incurred telephone expense of $480, to be paid next month

Complete the following chart to account for the above transactions. Under the ‘Account Type’ column, fill the cells with one of the following: Asset, Liability, Revenue or Expense. The first transaction has been completed for you as an example.

Do not enter dollar signs or commas in the input boxes.

For each transaction, two accounts are affected. List balance sheet accounts before income statement accounts. If both accounts are balance sheet accounts, list them in the order they appear on a balance sheet prepared under GAAP. For example, if the transaction impacts the cash account, cash would always appear first.

Date	Account Name	Account Type	Increase or Decrease	Amount
Jul 1	Cash	Asset	Increase	$2,300
	Service Revenue	Revenue	Increase	$2,300
Jul 2	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCapital AccountCashDepreciation ExpenseInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueNotes PayableNotes ReceivableMaintenance ExpensePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseService RevenueSalaries ExpenseSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned Revenue	AnswerAssetExpenseLiabilityRevenue	AnswerDecreaseIncrease	$Answer
	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCapital AccountCashDepreciation ExpenseInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueNotes PayableNotes ReceivableMaintenance ExpensePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseService RevenueSalaries ExpenseSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned Revenue	AnswerAssetExpenseLiabilityRevenue	AnswerDecreaseIncrease	$Answer
Jul 3	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCapital AccountCashDepreciation ExpenseInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueNotes PayableNotes ReceivableMaintenance ExpensePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseService RevenueSalaries ExpenseSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned Revenue	AnswerAssetExpenseLiabilityRevenue	AnswerDecreaseIncrease	$Answer
	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCapital AccountCashDepreciation ExpenseInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueNotes PayableNotes ReceivableMaintenance ExpensePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseService RevenueSalaries ExpenseSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned Revenue	AnswerAssetExpenseLiabilityRevenue	AnswerDecreaseIncrease	$Answer
Jul 15	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCapital AccountCashDepreciation ExpenseInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueNotes PayableNotes ReceivableMaintenance ExpensePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseService RevenueSalaries ExpenseSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned Revenue	AnswerAssetExpenseLiabilityRevenue	AnswerDecreaseIncrease	$Answer
	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCapital AccountCashDepreciation ExpenseInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueNotes PayableNotes ReceivableMaintenance ExpensePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseService RevenueSalaries ExpenseSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned Revenue	AnswerAssetExpenseLiabilityRevenue	AnswerDecreaseIncrease	$Answer
Jul 28	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCapital AccountCashDepreciation ExpenseInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueNotes PayableNotes ReceivableMaintenance ExpensePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseService RevenueSalaries ExpenseSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned Revenue	AnswerAssetExpenseLiabilityRevenue	AnswerDecreaseIncrease	$Answer
	AnswerAccounts PayableAccounts ReceivableAccumulated DepreciationAdvertising ExpenseBank LoanCapital AccountCashDepreciation ExpenseInsurance ExpenseInterest ExpenseInterest PayableInterest RevenueNotes PayableNotes ReceivableMaintenance ExpensePrepaid InsurancePrepaid RentProperty, Plant & EquipmentRent ExpenseService RevenueSalaries ExpenseSupplies ExpenseTelephone ExpenseTravel ExpenseUnearned Revenue	AnswerAssetExpenseLiabilityRevenue	AnswerDecreaseIncrease	$Answer

Answer 1

Date Account Name Account Type Increase or Decrease Amount Jul 1 Cash Asset Increase $2,300 Service Revenue Revenue Increase $2,300 Jul 2 Cash Asset Decrease $3,800 Prepaid Insurance Asset Increase $3,800 Jul 3 Cash Asset Increase $3,100 Service Revenue Revenue Increase $3,100 Jul 15 Cash Asset Increase $850 Accounts Receivable Asset Decrease $850 Jul 28 Accounts Payable Liability Increase $480 Telephone Expense Expense Increase $480