PREPARE A JOURNAL ENTRY

Transaction 1A: Total cash sales of barbecue amounted to P 800.

• Cash increased, Sales decreased

• Cash decreased, Sales decreased

• Cash increased, Sales increased

• Cash decreased, Sales increased

Transaction 1.B: The total cost of the barbecue sold is P 280.

• Cost of sales is increased; inventory is

  increased

• Cost of sales is decreased; inventory is

  decreased

• Cost of sales is decreased; inventory is

  increased

• Cost of sales is increased; inventory is

  decreased

Cast is increased; Sales is increased. Therefore, _______

• Cash is debited, Sales credited

• Cash is credited, Sales debited

• Cash credited, Sales credited

• Cash debited, Sales debited

Answer explanation

Asset is increased through debit.

Income is increased through credit

Cost of sales is increased; inventory is

decreased. Therefore, _________.

• Cost of Sales crediited, Inventory Credited

• Cost of Sales debited, Inventory debited

• Cost of Sales debited, Inventory Credited

• Cost of Sales credited, Inventory debited

Transaction 2: On March 20, 2021,the business paid P5,000 for an advertisement that was aired on radio.

• Cash is debited, Advertisement expense credited.

• Cash is credited, Advertisement expense debited.

• Cash is debited, Advertisement expense debited.

• Cash is credited, Advertisement expense credited.

Answer explanation

Cash decreased, it is an Asset Account and assets decreased in credit.

Advertisement expense increased, it is an Expense Account and Expenses increased in debit.