DOUBLE ENTRY SYSTEM

A business is started with the injection of 10,000 in cash. In which account is the credit entry made?

• Cash

• Capital

A business purchases equipment cash. In which account is the debit entry made?

• Equipment

• Supplies

A business owner withdraws cash of 1,000 from the business. In which account is the debit entry made?

• Drawings Account

• Cash

A supplier is paid 500 by cheque, is the cash account debited or credited?

• Credited

• Debited

A customer paid a loan of $400 using a direct transfer from the bank, do you debit or credit the loan account?

• Debit

• Credit

Is a bank loan an asset or a liability?

• Asset

• Liability

A business is started with 5,000 cash from the owner paid into the bank account. Which account is credited?

• Cash

• Capital

A __________ amount will appear on the left side of a T-account.

• Debit

• Credit

Equipment is sold for cash?

• Assets increase and decrease

• Assets and liabilities increase

Goods are purchased on credit terms?

• Assets decrease

• Liabilities increase