Each question will challenge your understanding of accounting principles and the correct recording methods for different business activities. Received $150,000 cash from investors for ownership in the company.b. 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.
What journal entry will a law firm make to record billing a client $3,800 for work performed?
- Record journal entries for these transactions.
- Increasing an expense is a debit and decreasing cash, an asset, is a credit.
- On accounts means the company will pay for it later, which is an increase in a liability called accounts payable.
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). Paying amounts owed is a decrease to a liability which is recorded with a debit. Amounts owed to suppliers is accounts payable. B. Increases in expenses are recorded with a debit.
Journal Entry for Cash Income
A current asset which indicates the cost of the insurance contract (premiums) that have been paid in advance. It represents the amount that has been paid but has not yet expired as of the balance sheet date. Record journal entries for these transactions. Record journal entries for following transactions. After recording the transactions,prepare a “T account” and balance the cash account. B. Owing a supplier is called accounts payable.
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Test your knowledge of double entry bookkeeping with our accounting journal and ledger quiz. A current asset representing the cost of supplies on hand at a point in time. The account is usually listed on the balance sheet after the Inventory account. The amount of insurance that was incurred/used up/expired during the period of time appearing in the heading of the income statement. The amount of insurance premiums that have not yet expired should be reported in the current asset account Prepaid Insurance.
Accounting Practice Quizzes
The total of the Debit column of the trial balance will exceed the total of the Credit column by $13,000. Auto-grading quizzes and tests with detailed stats and reports. Create quizzes and tests automatically from your content using AI.
Debits and Credits Outline
These quizzes are a great way to practice accounting. Answering these questions efficiently will prepare you for your tests and quizzes. Click the orange text below the quiz to view the answers. Watch the video below each practice quiz to see further explanation on how to solve these accounting practice questions.
Borrowing is an increase to notes payable which is recorded with a credit. Receiving cash is an increase to an asset which is recorded with a debit. Each journal entry must have at least one debit and one credit. A. Amounts owed from the customer is accounts receivable. The customer pays cash to the company.
B. Cost of goods sold is the account that is used to show that inventory is used to provide goods to the customer. Using inventory is recorded as the credit (decreasing) and cost of goods sold is recorded with a debit (expense increasing). If you need learn bookkeping and accounting online for free a refresher course on accounting journal entries you can view our basics of bookkeeping tutorials here. B. Expense accounts are debited when they increase. A service provided to the company this period is an increase in to the expense this period.