Understanding Journal Entries

What is a journal in accounting?

• A book of original entry

• A financial statement

• A ledger

• A balance sheet

What accounts are involved when purchasing supplies for cash?

• Supplies and Cash

• Revenue and Expenses

• Assets and Liabilities

• Owner’s Equity and Revenue

What is the third step in the four-step process to creating a journal entry?

• Determine the type of accounts

• Identify the accounts involved

• Decide on debit or credit

• Record the transaction

What action is taken on the accounts when supplies are purchased for cash?

• Increasing supplies and decreasing cash

• Decreasing supplies and increasing cash

• Increasing both supplies and cash

• Decreasing both supplies and cash

How do you increase revenue?

• With a debit

• With a credit

• By decreasing liabilities

• By increasing expenses

When you do a funeral for cash, what accounts are involved?

• Cash and Revenue

• Supplies and Accounts Payable

• Accounts Payable and Cash

• Revenue and Expenses

What accounts are involved when a family does not pay for a funeral at the time of service?

• Cash and Revenue

• Accounts Receivable and Revenue

• Accounts Payable and Cash

• Revenue and Expenses

What type of account is 'Mortgage Payable'?

• Liability

• Asset

• Expense

• Revenue

What is the effect of debiting building and crediting mortgage payable?

• Increases both accounts

• Decreases both accounts

• Increases building and decreases mortgage payable

• Increases building and increases mortgage payable

What is recorded in the general journal?

• Only debits

• Only credits

• Both debits and credits

• None of the above