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Exam 2: Recording Business Transactions

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Question 31

Multiple Choice

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A business pays $500 cash for supplies.Which account is credited?

A) Service revenue
B) Accounts payable
C) Cash
D) Supplies

E) B) and D)
F) B) and C)

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Question 32

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Debit refers to the right side of the T-account and credit refers to the left side.

A) True
B) False

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Question 33

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Accountants first record transactions in the:

A business makes a cash payment for advertising expense.Which account is debited?

For Capital,the category of account and its normal balance are:

An account is the detailed record of the changes in a particular asset,liability or owners' equity.

An owner invests $20 000 in her new business by depositing the cash in the business bank account.Which account is debited?

A business makes a cash payment to a supplier 'on credit' (for supplies that were purchased earlier) .Which account is debited?

Journalising a transaction means:

A trial balance summarises a ledger by listing all the accounts with their ending balances.

Which of the following is the order of steps to journalise an entry?

A business purchases equipment for cash in the amount of $8 000.Which account is debited?

The following transactions have been journalised and posted to the proper accounts. 1.Mark Call invested $7 000 cash in his new design services business. 2.The business paid the first month's rent with $700 cash. 3.The business purchased equipment by paying a $2 000 deposit and borrowing $4 500. 4.The business purchased supplies for $850 cash. 5.The business billed its clients a total of $4 000 for design services rendered. 6.The business collected $3 000 on credit from one of its clients. What is the balance in Service revenue?

Which of the following accounts is an owners' equity account?

An owner invests $20 000 in her new business by depositing the cash in the business bank account.Which account is credited?

A book holding all of the accounts is called the:

An asset account is increased by a debit.

A journal entry includes BOTH debit and credit amounts.

The following are the current month's balances for Toys Galore: $\begin{array} { | l | l | } \hline \text { Accounts payable } & \$ 8000 \\\hline \text { Revenue } & 9000 \\\hline \text { Cash } & 7000 \\\hline \text { Expenses } & 1500 \\\hline \text { Furniture } & 11,000 \\\hline \text { Accounts receivable } & 13,000 \\\hline \text { Iones, capital } & 3250 \\\hline \text { Loan payable } & 4000 \\\hline\end{array}$ What is the total amount of debits for the trial balance?

The trial balance is one of the three basic financial statements.