Question 1

List the four parts of a journal entry.

Accepted Answer

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Question 2

A business repays the amount borrowed on a note with cash.Which of the following accounts is credited?

Accepted Answer

Cash is the account that is credited when a business repays a loan or note payable. This is because cash is flowing out of the business to pay off the debt. Accounts payable is a liability account that is typically debited when a business borrows money or makes a purchase on credit. Notes payable is also a liability account that is debited when a business borrows money by signing a note. Notes receivable is an asset account that is credited when a business lends money to someone else and receives a promissory note in return.

Question 3

An accounting entry that is characterized by having multiple debits and/or multiple credits is called a ________ entry.

Accepted Answer

A compound journal entry is an entry that involves multiple debits and/or multiple credits. It is used when a single transaction affects multiple accounts. The debits and credits must still balance, but the entry is more complex than a simple entry with one debit and one credit.

Question 4

A business repays the amount borrowed on a note with cash.Which of the following accounts is debited?

Accepted Answer

When a business repays the amount borrowed on a note with cash, the liability account associated with the note (Notes Payable) is decreased. In double-entry accounting, decreasing a liability account is done by debiting that account.

Question 5

A business makes a payment in cash for advertising expense.Which of the following accounts is credited?

Accepted Answer

When a business makes a payment in cash, the Cash account is credited.

Question 6

A cash payment of $5,000 was made for dividends.Which of the following accounts is debited?

Accepted Answer

Dividends account is debited because it represents the distribution of earnings to shareholders.

Question 7

A business pays cash for dividends.Which of the following accounts is credited?

Accepted Answer

When a business pays cash for dividends, the Cash account is credited, as cash is going out of the business. The choice A, Common Stock, is incorrect because it is an equity account that is affected when a company issues stock, not when it pays dividends. Choice B, Dividends, is incorrect because it is the account that is being debited, not credited. Finally, choice D, Retained Earnings, is also incorrect because Retained Earnings is the account that is reduced by the dividend payment, not credited.

Question 8

A business performs services for its customer for $50,000 on account.Record the transaction in the journal.

Accepted Answer

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Question 9

A business makes a payment of $1,400 on a note payable.Which of the following journal entries would be recorded?

Accepted Answer

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Question 10

List the five steps of the journalizing and posting process.

Accepted Answer

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Question 11

Which of the following journal entries would be recorded if a business performs services and receives cash of $900 from the customer?

Accepted Answer

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Question 12

Employees worked and a business paid salaries of $6,000 in cash.Record the transaction in the journal.

Accepted Answer

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Question 13

Which of the following journal entries would be recorded if a business purchased office supplies on account in a previous accounting period and now makes a cash payment of $750 to the supplier to settle the account?

Accepted Answer

The journal entry to record the cash payment to settle the account would be a debit to Accounts Payable for $750 and a credit to Cash for $750. Option B is the only choice that reflects this entry. Option A records the purchase of office supplies on account, but not the subsequent cash payment. Option C and D record other transactions unrelated to this scenario.

Question 14

Which of the following journal entries would be recorded if a business purchased $800 of office supplies on account?

Accepted Answer

Journal entry for purchasing office supplies on account would require a credit to accounts payable and a debit to office supplies. Option B matches this requirement with accounts payable being credited and office supplies being debited.

Question 15

A business borrows cash by signing a note payable.Which of the following accounts is credited?

Accepted Answer

When a business borrows cash by signing a note payable, it means that they have promised to pay the borrowed amount back to the lender at a future date. Hence, the account that is credited is Notes Payable.

Question 16

Which of the following journal entries would be recorded if a corporation issued common stock and received $3,000?

Accepted Answer

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Question 17

For each transaction,identify which account is debited and which account is credited.Use proper account titles.

Accepted Answer

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Question 18

A business purchases equipment by paying $6,276 in cash and issuing a note payable of $19,177.Which of the following occurs?

Accepted Answer

When purchasing equipment, there is a decrease in cash and an increase in equipment. Therefore, cash is credited for the amount paid in cash ($6,276) and equipment is debited for the total cost of the equipment ($25,453). Additionally, when a note payable is issued, there is an increase in liabilities. Therefore, notes payable is credited for the amount of the note ($19,177). Option B correctly reflects these transactions.

Question 19

On October 31,a business pays $1,500 cash for television ads that appeared during October.Which of the following accounts is debited?

Accepted Answer

The payment for television ads is an expense and should be recorded in the Advertising Expense account. Therefore, choice D is the best option.

Question 20

A business purchased land for $250,000 cash.Record the transaction in the journal.

Accepted Answer

The answer of A business purchased land for $250,000 cash.Record...

Quiz 2: Recording Business Transactions

List the four parts of a journal entry.

A business repays the amount borrowed on a note with cash.Which of the following accounts is credited?

An accounting entry that is characterized by having multiple debits and/or multiple credits is called a ________ entry.

A business repays the amount borrowed on a note with cash.Which of the following accounts is debited?

A business makes a payment in cash for advertising expense.Which of the following accounts is credited?

A cash payment of $5,000 was made for dividends.Which of the following accounts is debited?

A business pays cash for dividends.Which of the following accounts is credited?

A business performs services for its customer for $50,000 on account.Record the transaction in the journal.

A business makes a payment of $1,400 on a note payable.Which of the following journal entries would be recorded?

List the five steps of the journalizing and posting process.

Which of the following journal entries would be recorded if a business performs services and receives cash of $900 from the customer?

Employees worked and a business paid salaries of $6,000 in cash.Record the transaction in the journal.

Which of the following journal entries would be recorded if a business purchased office supplies on account in a previous accounting period and now makes a cash payment of $750 to the supplier to settle the account?

Which of the following journal entries would be recorded if a business purchased $800 of office supplies on account?

A business borrows cash by signing a note payable.Which of the following accounts is credited?

Which of the following journal entries would be recorded if a corporation issued common stock and received $3,000?

For each transaction,identify which account is debited and which account is credited.Use proper account titles.

A business purchases equipment by paying $6,276 in cash and issuing a note payable of $19,177.Which of the following occurs?

On October 31,a business pays $1,500 cash for television ads that appeared during October.Which of the following accounts is debited?

A business purchased land for $250,000 cash.Record the transaction in the journal.