Chapter 4
The Accounting Cycle: Journals and Ledgers
98
Review Exercise
Catherine Gordon is running her own proprietary business called CGAccounting.CGAccounting
provides bookkeeping services to small and mid-sized companies.The company prepares financial
statements on a monthly basis and had the following closing balances at the end of May 2016.
CG Accounting
Balance Sheet
As at May 31, 2016
Assets
Liabilities
Cash
$4,200 Accounts Payable
$2,300
Accounts Receivable
3,100 Unearned Revenue
600
Equipment
6,000 Bank Loan
4,000
Total Liabilities
6,900
Owner's Equity
Gordon, Capital
6,400
Total Liabilities & Owner's Equity
$13,300
Total Assets
$13,300
CG Accounting uses a variety of accounts and account numbers in its accounting records.
Account Description
Account #
ASSETS
Cash
101
Accounts Receivable
105
Prepaid Insurance
110
Equipment
120
Accumulated Depreciation
125
LIABILITIES
Accounts Payable
200
Interest Payable
205
Unearned Revenue
210
Bank Loan
215
OWNER’S EQUITY
Gordon, Capital
300
Gordon, Drawings
310
Income Summary
315
Account Description
Account #
REVENUE
Service Revenue
400
EXPENSES
Advertising Expense
500
Bad Debt Expense
505
Depreciation Expense
510
Insurance Expense
515
Interest Expense
520
Maintenance Expense
525
Office Supplies Expense
530
Professional Fees Expense
535
Rent Expense
540
Salaries Expense
545
Telephone Expense
550
Travel Expense
555
