Practice Accounting Test Skills
The other choices are cash being paid or collected, which are common transactions. Journals can also include a code or folio number to cross-reference between the journal entries and the T-accounts (the next step in the accounting cycle). If you’re not yet familiar with journal entries, don’t worry! Check out the section just below for a summary of the most common journals, including links to each of the individual lessons… Journals (or journal entries) are simply records of individual transactions in chronological (date) order. An increase to revenues is recorded with a credit.
Journal Entry Practice Question Video
A company had the following transactions during the first month of operations. Record journal entries for each transaction. A liability account that reports amounts received in advance of providing goods or services. When the goods or services are provided, this account balance is decreased and a revenue account is increased. To learn more, see Explanation of Adjusting Entries.
Double Entry Bookkeeping
- Check your understanding of this lesson by taking the quiz in the Test Yourself!
- C. Making a payment is a decrease to cash and a decrease to an asset is recorded with a debit (not one of the choices).
- You should have written a T account for each account name used, posted the amounts on the proper debit or credit side and balanced each account.
- All others keep the accounting equation in balance.
- Reducing cash is recorded with a credit.
- C. You can not increase a liability and decrease an asset.
Paid $12,000 to employees who worked this month.g. Acquired manufacturing equipment costing $39,000, paid cash.h. Received a $100 utility bill for this month.j.
Latest Accounting Quizzes
Liability, owner’s equity, and revenue accounts will have a credit balance. 14) Purchased equipment for $2,500; paid $1,000 down and will pay the different in monthly payments during the stockholders equity balance sheet guide, examples, calculation next year. 1) Purchased equipment paying $4,000 cash and financing $10,000 to be repaid in monthly payments for 8 months. D. Purchasing an asset is an increase in the asset (debit).
Do you know your debits from your credits? Why not try one of our accounting quizzes and test your knowledge of bookkeeping and accounting. Test your knowledge of double entry bookkeeping with our accounting journal and ledger quiz. A. Record journal entries for the following transactions.B.
Click the “Check Your Answer” box below each problem to reveal the correct answer and explanation.
This also makes the accounting equation out of balance. All others keep the accounting equation in balance. (a.) is exchanging one asset for another. (b.) is receiving an asset and paying for it later. (d.) occurs when stock is issued to investors.
1) Borrowed $150,000 cash from the bank. C. Purchasing inventory is an increase in inventory which is recorded with a debit. On accounts means the company will pay for it later, which is an increase in a liability called accounts payable. Increasing a liability is recorded with a credit. Cash is not paid yet so it will not be used in the journal entry. D. Cash increases and is recorded with a debit.
Purchased inventory to be sold to customers, $45,000 on account.c. Rented warehouse space, $6,000 was paid for this month.d. Sold $5,000 of inventory on account (you have not been paid yet), sales price of $7,500.e. Acquired office furniture for $3,000 cashf.
Decreasing an asset is done with a credit which is not one of the choices. Paying later increases a liability which is done with a credit (b). A revenue and expense is not recorded together in the same journal entry.
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