How to Master 7-3 Accounting Problems: Tips and Answers

Introduction

Accounting problems can be challenging, especially when you’re dealing with complex calculations, multiple transactions, and various accounting methods. However, with the right strategy and approach, you can master any accounting problem, including the infamous 7-3 accounting problems.

So, what are the 7-3 accounting problems, and how can you solve them? In this article, we’ll show you some tips and answers that will help you become a pro at 7-3 accounting problems. Let’s get started.

What are 7-3 Accounting Problems?

7-3 accounting problems are a type of accounting question that involves using the seven-column ledger and the three-column ledger to record and balance transactions. These problems require you to apply your knowledge of accounting principles, such as double-entry bookkeeping, journal entries, trial balance, and financial statements.

In a 7-3 accounting problem, you’ll be given a set of transactions and asked to record them in the seven-column ledger and the three-column ledger, and then balance the ledgers to create financial statements.

Tips for Solving 7-3 Accounting Problems

Here are some tips that will help you solve 7-3 accounting problems more efficiently:

1. Understand the accounting principles involved: Before you start solving the problem, make sure you understand the accounting principles that are relevant to the transactions. For example, if the problem involves a sale on credit, you should know how to record it in the journal using the double-entry bookkeeping method.

2. Use a systematic approach: Organization is key when it comes to solving accounting problems. Create a table or chart that outlines the transactions, accounts, and amounts involved, and then use that as a guide when you’re recording them in the ledgers.

3. Pay attention to details: Accounting problems require precision and accuracy. Make sure you’re recording the transactions correctly, and double-check your work to ensure you’ve entered the right amounts and applied the right accounting principles.

4. Check your balances: After you’ve recorded all the transactions, make sure you balance the ledgers before moving on to the financial statements. This step is critical, as any error in the ledgers will affect the financial statements.

Answers to 7-3 Accounting Problems

Now that you know some tips for solving 7-3 accounting problems let’s look at some answers to practice problems to help you understand the steps involved.

Example problem:

On January 1, 2019, ABC Company purchased inventory on credit for $10,000. On January 15, 2019, ABC Company paid $5,000 to the vendor. On January 31, 2019, ABC Company sold the inventory for $12,000 on credit. The cost of the inventory sold was $8,000. The credit terms were 2/10, n/30.

Solution:

Step 1: Record the transactions in the journal using the double-entry bookkeeping method.

Debit Credit
Inventory $10,000
Accounts Payable $10,000

Accounts Payable $5,000
Cash $5,000

Accounts Receivable $12,000
Sales Revenue $12,000

Cost of Goods Sold $8,000
Inventory $8,000

Step 2: Transfer the amounts to the seven-column ledger and the three-column ledger.

Step 3: Balance the ledgers.

Step 4: Create the financial statements, including the income statement, balance sheet, and cash flow statement.

Conclusion

Solving 7-3 accounting problems can be challenging, but with the right strategy and approach, you can master them. Remember to understand the accounting principles involved, use a systematic approach, pay attention to details, and check your balances. Use the answers to practice problems to practice your skills, and you’ll be on your way to becoming an expert at 7-3 accounting problems.