Accounting Chapter 3

When services are sold on account, this account is credited

• Cash
• Accounts Receivable - name
• Accounts Payable - name
• Sales

When cash is paid for rent, this account is debited

• Cash
• Rent Expense
• Utilities Expense
• Accounts Payable - name

When supplies are bought on account, this account is credited

• Cash
• Supplies
• Accounts Payable - name
• Accounts Receivable - name

A debit to prepaid insurance means the account is…

• Increasing
• Decreasing
• No change to the account

A credit to Accounts Receivable - name means the account is…

• Increasing
• Decreasing
• No change to the account

A debit to cash means the account is…

• Increasing
• Decreasing
• No change to the account

A credit to Owner Name, Capital means the account is…

• Increasing
• Decreasing
• No change to the account

When cash is received from the owner as an investment, this account is credited

• Cash
• Sales
• Owner Name, Capital
• Owner Name, Drawing

Hypothetically, if we had a repair done on account, this account would be credited

• Cash
• Repairs Expense
• Accounts Payable - name
• Accounts Receivable - name

If we have one line left on page 1 of our journal, but 3 more transactions left for the month we should…

• Stop journalizing any transactions
• Start the transaction on page 1 and finish on page 2
• Cross out the last two transactions and re-write the new ones above these old ones
• Start the next transaction on journal page 2