Exam 2: Debits and Credits: Analyzing and Recording Business Transactions

An account that would be increased by a debit is

A chart of accounts is below. Following is a series of transactions. Indicate for each transaction the accounts that should be debited and credited by inserting the proper account number in the space provided. 111 Cash 312 M. Tharp, Withdrawals 112 Accounts Receivable 411 Delivery Fees Earned 121 Delivery Equipment 511 Salaries Expense 211 Accounts Payable 512 Rent Expense 311 M. Tharp, Capital 513 Advertising Expense 514 Gas Expense Debit         Credit          Transaction ________ ________ 1. Invested cash in the business. ________ ________ 2. Received cash for delivery services performed. ________ ________ 3. Billed a customer for services performed. ________ ________ 4. Paid accounts payable. ________ ________ 5. Collected accounts receivable. ________ ________ 6. Withdrew cash for personal use. ________ ________ 7. Paid advertising expense. ________ ________ 8. Paid rent expense for the month. ________ ________ 9. Purchased delivery equipment on account. ________ ________ 10. Paid salaries for the week.

A formal account that has columns for date, explanation, post reference, debit, and credit is called the

What would be the effect on accounts if the business received the telephone bill but did not pay it immediately?

The trial balance is prepared from

Accounts Receivable appears on the income statement.

A chart of accounts is a listing of the accounts and their ending balances.

The beginning balance in Cash was $3,500. Additional cash of $1,000 was received. Cheques were written totaling $1,500. The cash balance is

An account is said to have a debit balance if

Carrie flew to Toronto on a business trip. The purchase price of the ticket was $679 and it was bought from a travel agency on account. The entry to record the transaction is

Following are the five steps in analyzing business transactions. Apply the five steps in analyzing the following transaction: Paid the monthly telephone expense, $100. 1. Which accounts are affected? 2. To which categories do the accounts belong? 3. Are the accounts increasing or decreasing? How much? 4. What are the debit and credit rules? 5. On what side of the accounts do the amounts belong?

The debit side of all accounts increases the balance and the credit side decreases all accounts.

Accounts Receivable has a normal balance of $1,000. After collecting $700, the balance in the account is

A ledger

Accounts Payable is an asset account that is increased on the credit side.

Office Supplies had a normal starting balance of $75. There were debit postings of $90 and credit postings of $70 during the month. The ending balance is

A compound entry is

The Withdrawals account is

When a computer is bought on account, the result is

The Supplies account is increased by a debit.