L2: Recording transactions and journal entries

Accounts are grouped in a book called the:

• A) trial balance.

• B) chart of accounts.

• C) journal.

• D) ledger.

Which of these is (are) an example of a liability account?

• Withdrawals

• Telephone Expense

• Salary Payable

• All of the above are liabilities

Which of these accounts has a normal credit balance?

    

• Capital

• Withdrawals

• Cash

• Salary Expense

Which of these statements is correct?

• The chart of accounts is the first place that accounting transactions are written.

• A business transaction is recorded first in the ledger and then posted to the journal.

• The ledger is a chronological listing of all transactions.

• Posting is the copying of transactions from the journal to the ledger.

The purchase of equipment for cash would:

• A) increase total assets.

• B) increase total assets and decrease liabilities.

• C) decrease both liabilities and owner's equity.

• D) have no effect on total assets.

Davie Services purchased $500 of office furniture on account. The effect of this transaction on the accounting equation is to:

• Have no effect on total assets.

• Increase assets and decrease owner’s equity.

• Increase assets and increase liabilities.

• Decrease assets and decrease owner’s equity.

Accounts Payable has a normal beginning balance of $18,500. During the period, purchases on account total $50,500 and payments on account total $45,600. Determine the correct ending balance in Accounts Payable.

• $23,400, debit

• $13,600, debit

• $23,400, credit

• $13,600, credit

A payment of $400 to a creditor, on account, will cause:

• cash to be debited for $400.

• accounts receivable to be credited for $400.

• accounts payable to be debited for $400.

• accounts payable to be credited for $400.