Title: Debit and Credit rules:
Author: user1
Last saved by: DDSB

Unit 2: The Accounts in a Service Business 
Activity 3: Double-Entry Accounting
Name: _____________________________	Mark:              /10

Assignment:  Double Entry Accounting

Analysing Transactions – Pete’s Gym

Transaction 1 On January 2, Pete bought $100 office supplies. He paid cash.

Account Affected

Increase/
Decrease

Type of Account

Debit/
Credit

Amount

Transaction 2 On January 3, Pete collected $75 from one customer who has an account with Pete’s Gym. 

Account Affected

Increase/
Decrease

Type of Account

Debit/
Credit

Amount

Transaction 3 On January 4, Pete purchased $250 of fitness equipment from Sport Check on account which means he will pay for it at a later date. 

Account Affected

Increase/
Decrease

Type of Account

Debit/
Credit

Amount

Transaction 4 On January 5, Pete paid $500 to reduce his bank loan. 

Account Affected

Increase/
Decrease

Type of Account

Debit/
Credit

Amount

Transaction 5  On January 8, Pete paid Sport Check the $250 that he owed them.

Account Affected

Increase/
Decrease

Type of Account

Debit/
Credit

Amount

**Then check your answers
Check Your Understanding 
1.	A decrease in a liability is recorded on the _______ side of the account.

a) left/debit
b) left/credit
c) right/debit
d) right/credit 

2.	A decrease in an asset is recorded on the _______ side of the account.

a) left/debit
b) left/credit
c) right/debit
d) right/credit 

3.	An increase in an owner’s equity account is recorded on the _______ side of the account.

a) left/debit
b) left/credit
c) right/debit
d) right/credit 

**Then check your answers

Activity
1.  Complete the following chart with the accounting terms: debit and credit.

| Increase | Decrease
Asset | |
Liability | |
Owner’s Equity | |

2. Analyse the following transactions for Rebecca’s Pet Grooming and then record the transactions in the T-accounts. Examine the account names and opening balances for Rebecca Chow’s business.

Transaction 1 On February 1, Rebecca paid $150 cash for additional grooming equipment. 

Account Affected

Increase/
Decrease

Type of Account

Debit/
Credit

Amount

Transaction 2 On February 2, Rebecca collected $40 of her accounts receivable. 

Account Affected

Increase/
Decrease

Type of Account

Debit/
Credit

Amount

Transaction 3 On February 3, Rebecca purchased $75 of shampoo on account from a pet supply store which means she will pay for it at a later date. 

Account Affected

Increase/
Decrease

Type of Account

Debit/
Credit

Amount

Transaction 4 On February 4, Rebecca invested an additional $200 in cash in her business. 

Account Affected

Increase/
Decrease

Type of Account

Debit/
Credit

Amount

Transaction 5 On February 5, Rebecca sold a desk that she no longer needed for $150 cash. 

Account Affected

Increase/
Decrease

Type of Account

Debit/
Credit

Amount

Rebecca’s Pet Grooming Ledger

Cash | | Accounts Payable
Jan 31        600 | | | | Jan 31         200

Accounts Receivable | | Rebecca Chow, Capital
Jan 31        200 | | | | Jan 31     2,250

Grooming Supplies | |
Jan 31        100 | | |

Grooming Equipment | |
Jan 31        750 | | |

Furniture | |
Jan 31        800 | | |

3.  What are the total assets for Rebecca’s Pet Grooming on January 31?

4.  What are the total liabilities and owner’s equity for Rebecca’s Pet Grooming on January 31?

5.  What are the total assets for Rebecca’s Pet Grooming on February 5?

6.  What are the total liabilities and owner’s equity for Rebecca’s Pet Grooming on February 5?