Identifying and recording business transactions

Transactions are recorded in the journal

• Chronologically

• Alphabetically

• Numerically

• Chromatically

An entry that debits Prepaid Expense and credit Cash for advance payment to a supplier is recorded using the _________ method.

When a business issues an invoice, it will

• debit Accounts Payable.

• debit Accounts Receivable.

• credit Cash.

• debit Sales.

Mr. Tan, the owner of XYZ Enterprise, collected the receivable of business from a customer and deposited the amount collected to his personal account. To record this transaction, XYZ's accountant will

• debit Cash and credit Tan, Capital

• debit Tan, withdrawal and credit Accounts Receivable

• debit Tan, Withdrawal and credit Cash

• ignore this transaction.

Mr. Chua, the owner of HIJ Enterprise, collected the receivable of business from a customer and deposited the amount collected to the business bank account. To record this transaction, HIJ's accountant will

• ignore this transaction

• debit Cash and credit Accounts Receivable

• debit Tan, withdrawal and credit Accounts Receivable

• debit Cash and credit Tan, Capital

Which among the following is an operating activity of the business?

• The owner paid for the electricity of his personal house.

• The business paid for the repairs of the the cracks in the building wall.

• The business sold three (3) service vehicle.

• Obtained P50,000 cash from a lending organization.

Statement 1: When an entity uses a special journal, entries made in the special journal will also need to be recorded in the general journal.

Statement 2: Special journal will be used to recorded recurring transactions.

• Both statements are correct.

• Both statements are incorrect.

• Only Statement 1 is incorrect.

• Only Statement 2 is incorrect.

Which among the following may reduce Accounts Receivable when issued by the entity? (Choose all those that apply.)

• Official receipt

• Debit memorandum

• Credit memorandum

• Sales invoice

Statement 1: When an entity was issued an official receipt, it means that the entity will create an entry with a credit Cash.

Statement 2: The entry to record a transaction when the entity issues an official receipt will always have a credit to Sales or Service Revenue

• Both statements are correct.

• Both statements are incorrect.

• Only Statement 1 is correct.

• Only Statement 2 is correct.

When an entity purchased fixed asset in cash, it will

• Debit the Fixed Asset Account and Credit Cash

• Debit Cash and Credit the Fixed Asset Account

• Debit the Fixed Asset Account and Credit Accounts Payable

• Debit Accounts Payable and Credit the Fixed Asset Account