18 Questions
What type of accounts are assets and expenses?
Debit accounts
In a balanced journal entry, what should be equal?
Total of debit account amounts and total of credit account amounts
Which of the following is a liability?
Notes payable
What are economic resources that will benefit the business in the future classified as?
Assets
If a business issues common stock, how would this transaction affect equity?
Increase equity
When paying rent expenses, which accounts are affected?
Both assets and expenses accounts
In double-entry accounting, when a company issues common stock, the effect is recorded as:
Debit to Common Stock account and credit to Cash account
If a company purchases supplies on account, the appropriate journal entry would be:
Debit Supplies; Credit Accounts Payable
When a company pays rent expenses, the journal entry would include:
Debit Rent Expenses; Credit Cash
Recording revenue for services rendered typically involves:
Debiting Accounts Receivable; Crediting Revenue
In a transaction involving an equity account, which entry is correct?
Debit Cash; Credit Equity
How are debits and credits determined for an asset account?
Assets are debited and credited depending on whether they increase or decrease
Which of the following would result in a credit to the Cash account?
Issuing common stock
If Ned Brown, M.D., P.C. pays rent expenses, which accounts are affected?
Expenses and Owner's Equity
When recording revenue for services rendered, which accounts are involved?
Revenues and Owner's Equity
What happens to the Capital account when common stock is issued?
It increases
In the context of the text, what effect does purchasing supplies on account have on the Accounts Payable account?
It increases Accounts Payable
When recording a transaction involving an asset increase, which accounts are generally affected?
Assets and Owner's Equity
Test your knowledge about when credits increase and decrease in accounting transactions, as well as the steps of the transaction recording process. Practice using the rules of debit and credit to journalize transactions effectively.
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