Question

You have a credit card bill from ABC Credit for a total of $3,754. Please group the transactions within the appropriate T-Accounts based on the chart of accounts in your resources section. Within that balance the following transactions are listed:
$420 Office Supplies
$334 Auto (company van payment)
$1500 123 Computers to Go
$250 Electric Company
$100 Water
$150 Good Steak House (company luncheon)
$250 ABC Office Supplies
$100 Fuel Stop
$650 Furniture

Answer 1

The T-Account can be made as follows with the credit of $3,754. The expenses are deducted from the balance as the total credit available.

What is Expense?

Expenses are the costs that are paid by businesses, these costs are incurred for the operations of business. The expenses are paid from the cash/ bank balance available at the business.

It is recommended that the expenses are in a control and are lower than the revenue generated by the business.

T-Account

Operating Expense Account

$420

$250

$100

$250

Petty Expenses Account

$150

$100

Asset Account

$1500

$650

$334

The account are made according to the nature of expenses, there are two expenses that are not to be classified as an expense instead they need to be treated as a capital expenditure that is to be posted in Asset account.

Expenses with one off event and small amount and in general in nature are posted in petty expenses

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