Week 5 - Journal entry

A debit is used to record:

• A decrease in an asset account.

• A decrease in an expense account.

• An increase in the balance of common stock.

• An increase in the balance of retained earnings.

A credit entry:

• Is recorded on the left side of a T-account.

• Decreases asset and expense accounts, and increases liability, common stock, and revenue accounts.

• Increases asset and expense accounts, and decreases liability, common stock, and revenue accounts.

• Is always an increase in an account.

Double-entry accounting is an accounting system

• That records each transaction twice.

• That insures that errors never occur.

• In which each transaction affects and is recorded in two or more accounts but that could include two debits and no credits.

• That records the effects of transactions and other events in at least two accounts with equal debits and credits.

Rocky Industries received its telephone bill in the amount of $300, and immediately paid it. Rocky's general journal entry to record this transaction will include a

• Debit to Telephone Expense for $300.

• Credit to Accounts Payable for $300.

• Debit to Cash for $300.

• Credit to Telephone Expense for $300.

Wisconsin Rentals purchased office supplies on credit. The general journal entry made by Wisconsin Rentals will include a:

• Credit to Retained Earnings.

• Debit to Accounts Receivable.

• Debit to Accounts Payable.

• Credit to Accounts Payable.

Robert Haddon contributed $70,000 in cash and some land worth $130,000 to open a new business, RH Consulting. Which of the following general journal entries will RH Consulting make to record this transaction?

• Assets $200,000

  Common Stock $200,000

• Cash and Land $200,000

  Common Stock $200,000

• Cash $70,000

  Land $130,000

  Common Stock $200,000

• Common stock $200,000

  Cash $70,000

  Land $130,000