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Questions and Answers
Which account is debited when recording sales on credit?
Which account is debited when recording sales on credit?
- Trade Receivables Control Account (correct)
- Sales Account
- Trade Payables Control Account
- Cash at Bank Account
Purchases on credit are credited to the purchase/expenditure account.
Purchases on credit are credited to the purchase/expenditure account.
False (B)
Cash received for credit sales is debited to the ______ account.
Cash received for credit sales is debited to the ______ account.
cash at bank
When summarizing sales totals, what principle of accounting is applied if transactions are entered individually rather than in a batch?
When summarizing sales totals, what principle of accounting is applied if transactions are entered individually rather than in a batch?
If a business makes a sale of shoes for $200 on credit, which ledger accounts are affected and by how much?
If a business makes a sale of shoes for $200 on credit, which ledger accounts are affected and by how much?
Sales returns are treated with the same principles as sales, except that the double entry is:
Sales returns are treated with the same principles as sales, except that the double entry is:
When a customer returns goods, the sales returns account is credited.
When a customer returns goods, the sales returns account is credited.
When goods are returned by a customer, the trade receivables control account is ______.
When goods are returned by a customer, the trade receivables control account is ______.
If a business issues a credit note for $50 due to a sales return, what is the double entry?
If a business issues a credit note for $50 due to a sales return, what is the double entry?
In accounting for purchases, which account is credited when recording purchases on credit from suppliers?
In accounting for purchases, which account is credited when recording purchases on credit from suppliers?
Electricity expenses are debited to the trade payables control account.
Electricity expenses are debited to the trade payables control account.
When cash is paid for credit purchases, the trade payables control account is ______.
When cash is paid for credit purchases, the trade payables control account is ______.
Describe the double entry for a $100 purchase of supplies on credit.
Describe the double entry for a $100 purchase of supplies on credit.
When returning goods to a supplier, which account is debited?
When returning goods to a supplier, which account is debited?
Purchase returns increase the amount owed to suppliers.
Purchase returns increase the amount owed to suppliers.
When goods are returned to a supplier, the purchases returns account is ______.
When goods are returned to a supplier, the purchases returns account is ______.
What is the double entry for a $25 return of goods to a supplier?
What is the double entry for a $25 return of goods to a supplier?
Cash receipts are generally posted to which account in the general ledger?
Cash receipts are generally posted to which account in the general ledger?
When a business receives a loan, the loan account is debited.
When a business receives a loan, the loan account is debited.
When a business sells an asset for cash, the cash at bank account is ______.
When a business sells an asset for cash, the cash at bank account is ______.
Give an example of a double entry when $500 is received from a trade receivable.
Give an example of a double entry when $500 is received from a trade receivable.
Cash payments are posted to which account?
Cash payments are posted to which account?
Trade payables are credited when cash payments are made to suppliers.
Trade payables are credited when cash payments are made to suppliers.
When a company pays its telephone bill, the telephone expense account is ______.
When a company pays its telephone bill, the telephone expense account is ______.
What is the double entry for a $75 payment made for gas?
What is the double entry for a $75 payment made for gas?
Match the following transaction with the correct debit and credit entry:
Match the following transaction with the correct debit and credit entry:
A business purchases equipment for $5,000, paying with cash. Which of the following is the correct entry?
A business purchases equipment for $5,000, paying with cash. Which of the following is the correct entry?
If a customer returns goods and receives a cash refund, the correct entry is to debit Sales Returns and credit Trade Receivables.
If a customer returns goods and receives a cash refund, the correct entry is to debit Sales Returns and credit Trade Receivables.
When a business takes out a loan, cash at the bank is ______ and the Loan Payable account is ______.
When a business takes out a loan, cash at the bank is ______ and the Loan Payable account is ______.
Provide the journal entry for the purchase of office supplies on credit for $200.
Provide the journal entry for the purchase of office supplies on credit for $200.
Which of the following correctly describes the treatment of discounts received from suppliers?
Which of the following correctly describes the treatment of discounts received from suppliers?
If a company incorrectly debits Cash and credits Sales when it should have debited Accounts Receivable and credited Sales, the error will have no impact on the trial balance.
If a company incorrectly debits Cash and credits Sales when it should have debited Accounts Receivable and credited Sales, the error will have no impact on the trial balance.
The double-entry system requires that for every transaction, the total ______ must equal the total ______.
The double-entry system requires that for every transaction, the total ______ must equal the total ______.
Explain how to correct an error where a $500 purchase of equipment was mistakenly recorded as $5000. Assume the purchase was made on credit.
Explain how to correct an error where a $500 purchase of equipment was mistakenly recorded as $5000. Assume the purchase was made on credit.
Match the following to their respective debit or credit impacts:
Match the following to their respective debit or credit impacts:
A business provides services on account of $1,000. Which is the correct entry?
A business provides services on account of $1,000. Which is the correct entry?
If a company forgets to record depreciation expense at the end of the period, assets will be understated and net income will be overstated.
If a company forgets to record depreciation expense at the end of the period, assets will be understated and net income will be overstated.
When a business provides services for cash, the ______ account is debited and the ______ account is credited.
When a business provides services for cash, the ______ account is debited and the ______ account is credited.
Describe the correcting entry if a bank deposit of $750 was incorrectly recorded as $570.
Describe the correcting entry if a bank deposit of $750 was incorrectly recorded as $570.
Which of the following scenarios requires a compound journal entry?
Which of the following scenarios requires a compound journal entry?
In a periodic inventory system, the cost of goods sold is calculated and recorded at the time of each sale.
In a periodic inventory system, the cost of goods sold is calculated and recorded at the time of each sale.
If a company fails to accrue salaries expense at year-end, ______ will be understated and ______ will be overstated.
If a company fails to accrue salaries expense at year-end, ______ will be understated and ______ will be overstated.
Your accounts Payable balance is $5000. You receive notice from a supplier you bought the product for that cost $5000, but the amount has to be paid immediately and that would require the payment of the principal plus 10% interest. What is the journal entry?
Your accounts Payable balance is $5000. You receive notice from a supplier you bought the product for that cost $5000, but the amount has to be paid immediately and that would require the payment of the principal plus 10% interest. What is the journal entry?
Match the scenario descriptions to the journal entries that properly resolve the situation
Match the scenario descriptions to the journal entries that properly resolve the situation
Flashcards
Sales on Credit
Sales on Credit
When sales are made on credit, the trade receivables control account is debited, and the sales account is credited.
Purchases on Credit
Purchases on Credit
When purchases are made on credit, the purchase/expenditure account is debited, and the trade payables control account is credited.
Cash Received for Credit Sales
Cash Received for Credit Sales
When cash is received for credit sales, the cash at bank account is debited, and the trade receivables control account is credited.
Cash Paid for Credit Purchases
Cash Paid for Credit Purchases
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Sales Returns
Sales Returns
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Purchases Returns
Purchases Returns
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Cash at Bank Account
Cash at Bank Account
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Study Notes
Entering Transactions to the General Ledger Accounts
- Sales on credit are debited to the trade receivables control account, with a credit to the sales account.
- Purchases on credit are debited to the purchase/expenditure account, with a credit to the trade payables control account.
- Cash received for credit sales is debited to the cash at bank account, with a credit to the trade receivables control account.
- Cash paid for credit purchases is debited to the trade payables control account, with a credit to the cash at bank account.
Sales
- Business transactions are entered from source documents into ledger accounts.
- In one example:
- Jan 10: Jones & Co. - Total Invoiced: $105.00, Boot Sales: $60.00, Shoe Sales: $45.00
- Smith Ltd - Total Invoiced: $86.40, Boot Sales: $86.40
- Alex & Co. - Total Invoiced: $31.80, Shoe Sales: $31.80
- Enor College - Total Invoiced: $1,264.60, Boot Sales: $800.30, Shoe Sales: $464.30
- Sales can be entered as summary totals or individual transactions depending on the accounting software.
- Total sales are posted with a debit to trade receivables control account ($1487.80) and a credit to the sales account ($1487.80).
- The ledger account postings are: Trade receivables control account is debited $1487.80, sale of shoes account is credited $541.10, and sale of boots account is credited $946.70.
Sales Returns
- Recording sales returns uses the same principles as recording sales, but the double entry is reversed.
- Credit notes are issued for sales returns.
- April 30, 20X8: Credit note CR008 issued to Owen Plenty for 3 pairs of 'Texas' boots, amounting to $135.00.
- Sales returns is debited $135.00 and trade receivables control account is credited $135.00.
Purchases and Purchase Returns
- Can be listed and posted similar to sales and sales returns.
Purchases
- Purchases from credit suppliers are shown in an example.
- Purchases amounts:
- March 15, 20X8: Cook & Co. - Total Invoiced: $315.00, Purchases: $315.00
- W Butler - Total Invoiced: $29.40, Purchases: $29.40
- EEB - Total Invoiced: $116.80, Electricity etc: $116.80
- Show Fair Co. - Total Invoiced: $100.00, Purchases: $100.00
- Unlike sales, there are more expenditure accounts for purchases and expenses (e.g., purchases and electricity).
- Total purchases are recorded with a debit to purchases ($444.40) and electricity ($116.80) and a credit to trade payables control account ($561.20).
Purchases Returns
- Use of purchases returns to credit suppliers is demonstrated.
- April 29, 20X8: Boxes Co. supplied 300 cardboard boxes with amount $46.60.
- Trade payables control account is debited $46.60, and purchases returns is credited $46.60.
Cash Receipts and Cash Payments
- Posted to the cash at bank account in the general ledger.
Cash Receipts
- Cash at bank is debited $3470.
- Trade receivables control account: $1240.
- Sales: $230.
- Loan: $1800
- Machine disposal: $200
Cash Payments
- September 1, 20X7:
- Trade payables: Kew - $120 to Trade payables
- Trade payables: Hare - $310 to Trade payables
- Telephone - $400 as other
- Gas bill - $280 as other
- Petty cash - $100 to petty cash
- Machine purchase - $1500 as other
- Trade payables control account $430
- Petty cash: $100
- Telephone: $400
- Gas: $280
- Machine: $1500
- Cash at Bank: $2710
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