0402 - Journal entries - MCQ

A business buys a machine for $500 (cash) and pays machinery insurance $50 (Cash). Which of the following shos the correct double entry for this transaction?

• Debit machinery $550, credit cash $550
• Debit cash $550, credit machinery $550
• Debit machinery $500 , credit cash $550, debit insurance expense $50
• Debit cash $550 , credit machinery $500, credit insurance expense $50

A machine (cost $5,000) is bought on credit. Subsequently, $1,000 of the debt is paid by cheque. Which of the following correctly records the transaction?

• Debit payables $5,000, credit machine $5,000. Debit bank $1,000, credit payables $1,000
• Debit payables $5,000, credit machine $5,000. Debit payables $1,000, credit bank $1,000
• Debit machine $5,000, credit payables $5,000. Debit bank $1,000, credit payables $1,000
• Debit machine $5,000, credit payables $5,000. Debit payables $1,000, credit bank $1,000

Which of the following correctly records discount received?(i) DR Purchase Discount(ii) CR Purchase Discount(iii) DR Accounts Payable(iv) CR Accounts Payable

• (ii), (iii)
• (i), (iv)
• (ii), (iv)
• (i), (iii)

During March, a business has the following transactions. Credit sales $15,000, receipts from customers $10,000, discounts allowed $500. Which of the following entries correctly record these transactions?(i) DR sales $15,000, CR accounts receivable $15,000(ii) DR bank $10,000, CR accounts receivable $10,000(iii) DR sales discount $500, CR accounts receivable $500(iv) CR sales $15,000, DR accounts receivable $15,000

• (i), (ii), (iii)
• (ii), (iii), (iv)
• (i), (iii), (iv)
• (ii), (iv)

On July 7, 2017, Reethink Enterprises performed cash services of $1,400. The entry to record this transaction would include

• a debit to Service Revenue of $1,400.
• a credit to Accounts Receivable of $1,400.
• a debit to Cash of $1,400.
• a credit to Accounts Payable of $1,400.

Meenen Company purchases equipment for $1,200 and supplies for $400 from Sanders Co. for $1,600 cash. The entry for this transaction will include a

• debit to Equipment $1,200 and a debit to Supplies Expense $400 for Sanders.
• credit to Cash for Sanders.
• credit to Accounts Payable for Meenen.
• debit to Equipment $1,200 and a debit to Supplies $400 for Meenen.

Jack Wiser withdraws $300 cash from his business for personal use. The entry for this transaction will include a debit of $300 to

• Jack Wiser, Drawing.
• Jack Wiser, Capital.
• Owner's Salary Expense.
• Salaries Expense.

On October 3, Nick Carter, a carpenter, received a cash payment for services previously billed to a client. Nick paid his telephone bill, and he also bought equipment on credit. For the three transactions, at least one of the entries will include a

• credit to Nick Carter, Capital.
• credit to Notes Payable.
• debit to Accounts Receivable.
• credit to Accounts Payable.

On January 14, Franco Industries purchased supplies of $500 on account. The entry to record the purchase will include

• a debit to Supplies and a credit to Accounts Payable.
• a debit to Supplies Expense and a credit to Accounts Receivable.
• a debit to Supplies and a credit to Cash.
• a debit to Accounts Receivable and a credit to Supplies.