AboutMike Wellman Expertise I can answer questions dealing with financial accounting, tax accounting, bookkeeping and payroll issues. NO PENSION questions.
Experience Certified in 1980. Experience with Fortune 15 company in finacial accounting, manager at Price Waterhouse and then over 20 years with small business clients.
Question I am a teacher(9-12) who has been assigned to teach accounting. A question came up that I couldn't answer. We are working with balance sheets. The transaction: Paid cash for one month of insurance $100.00. The book tells us it would be +$100.00 under Supplies. and -$100.00 under Cash. Why is it not right to -$100.00 from Owners equity
Answer It would be a debit to insurance expense and a credit to cash. It will not be until the end of the year when all profit & loss (nominal) accounts are closed to income summary and then retained earnings that the expense affects the balance sheet again.
