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Exam 2: Debits and Credits: Analyzing and Recording Business Transactions

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Question 41

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Each part of a business transaction is recorded in the accounting equation under a specific account.

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Question 42

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The right side of any account is the

A) debit side.
B) credit side.
C) ending balance.
D) footings.

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Question 43

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The left column of a financial statement is often used to

Net income or net loss for a period is calculated by the following formula:

When cash is increased, the Cash account is debited.

A transaction that involves more than one credit or more than one debit is called a compound entry.

Which of the following groups of accounts have a normal debit balance?

Determine the ending owner's equity of a business having a beginning owner's equity of $ 9,500, additional investments of $450, withdrawals of $ 1,000, and net income of $ 1,400.

Accounts Payable had a normal starting balance of $750. There were debit postings of $600 and credit postings of $350 during the month. The ending balance is

Which of the following types of accounts has a normal debit balance?

Below is a chart of accounts. Following is a series of transactions. Indicate for each transaction the accounts that should be debited and credited by inserting the proper account number in the space provided. $\begin{array} { l l } 111 \text { Cash } & 312 \text { R. Andrews, Withdrawals } \\112 \text { Accounts Receivable } & 411 \text { Service Fees } \\121 \text { Office Equipment } & 511 \text { Salaries Expense } \\211 \text { Accounts Payable } & 512 \text { Rent Expense } \\311 \text { R. Andrews, Capital } & 513 \text { Advertising Expense }\end{array}$ Debit         Credit          Transaction ________ ________ 1. Purchased office equipment on account. ________ ________ 2. Paid salaries for the week. ________ ________ 3. Invested additional cash in the business. ________ ________ 4. Received cash for services performed. ________ ________ 5. Billed a client on account for services performed. ________ ________ 6. Paid accounts payable. ________ ________ 7. Collected accounts receivable. ________ ________ 8. Withdrew cash for personal use. ________ ________ 9. Paid advertising expense. ________ ________ 10. Paid rent expense for the month.

A credit may signify a(n)

On which financial statement would you find the ending Capital balance?

Identify the normal balance for each of the following accounts by placing a Dr. (debit) or a Cr. (credit) in the space provided. ________ 1. Computer ________ 2. M. Bryant, Withdrawals ________ 3. M. Bryant, Capital ________ 4. Legal Fees ________ 5. Cash ________ 6. Accounts Receivable ________ 7. Accounts Payable ________ 8. Rent Expense ________ 9. Office Equipment ________ 10. Supplies

Which type of account would be reported on the income statement?

Which of the following types of accounts has a normal credit balance?

When the owner invests computer equipment in the business, cash is increased.

Accounts Payable indicates amounts owed to us by our suppliers.

A debit to an expense account was posted to a revenue account. This error would cause

A T account is used for demonstration purposes.