Accounting Analyze Transactions Quiz

Transaction: 1 Company A purchased equipment for $10,000 cash.

Answer explanation

1. Debit: Equipment

2. Credit: Cash

Transaction: 2 Company B obtained a loan of $50,000 from a bank.

Answer explanation

1. Debit: Cash

2. Credit: Loan Payable

Transaction: 3 Company C sold merchandise for $20,000 cash.

Answer explanation

1. Debit: Cash

2. Credit: Sales Revenue

Transaction: 4 Company D paid $5,000 in salaries to its employees.

Answer explanation

1. Debit: Salaries Expense

2. Credit: Cash

Transaction: 5 Company E received $30,000 in advance from a customer for services to be provided next month.

Answer explanation

1. Debit: Cash

2. Credit: Unearned Revenue

Transaction: 6 Company F purchased inventory on credit for $15,000.

Answer explanation

1. Debit: Inventory

2. Credit: Accounts Payable

Transaction: 7 Company G declared a cash dividend of $8,000 to be paid to its shareholders.

Answer explanation

1. Debit: Retained Earnings (or Dividends Declared)

2. Credit: Cash

Transaction: 8 Company H received $25,000 in investment from a new shareholder in exchange for company stock.

Answer explanation

1. Debit: Cash

2. Credit: Common Stock (or Paid-in Capital)

Transaction: 9 Company K paid off $12,000 accounts payable to a supplier.

Answer explanation

1. Debit: Accounts Payable

2. Credit: Cash

Transaction: 10 Company J recorded depreciation expense of $3,000 on its equipment.

Answer explanation

1. Debit: Depreciation Expense

2. Credit: Accumulated Depreciation