B. Accumulated depreciation is the account that is always credited when recording depreciation expense. This account is the total of all prior years’ depreciation expense. Accumulated depreciation is a contra asset account which means it is opposite of an asset. Assets increase with a debit, so accumulated depreciation is increased with a credit (opposite).
Double Entry Bookkeeping
Use the letter of the transaction in place of the date. B. Owing a supplier is called accounts payable. B. A credit to a liability account is an increase.
Full Accounting Questions and Answers
- You need not include explanations or account numbers.
- By the terms “on account”, it means that the amount has not yet been paid; and so, it is recorded as a liability of the company.
- I would definitely recommend to time yourself when you practice each of these exercises.
- Just like your homework problems, it’s important to understand the “why” behind the answer, even if you answer the question correctly.
- There is an increase in an asset account (Furniture and Fixtures) in exchange for a decrease in another asset (Cash).
C. Wages paid to employees who worked this period is an increase to an expense and a decrease to cash. Increasing an expense is a debit and decreasing cash, an asset, is a credit. The journal book must record every business transaction, which means entries need to be made. In accounting lingo, this is called a journal entry.
- B. Owing a supplier is called accounts payable.
- Note that there is no time limit to answer the questions, and you can have as many goes at answering each question as you like.
- July 1 The company issued $ 600,000 of capital stock for cash.
- Why not try one of our accounting quizzes and test your knowledge of bookkeeping and accounting.
- 5 Office space was rented for July, and $ 5,000 was paid for the rental.
- Sold $5,000 of inventory on account (you have not been paid yet), sales price of $7,500.e.
Quizzes
Test your knowledge of double entry bookkeeping with our accounting transactions quiz. Jan. 1 The company received $ 560,000 cash and $ 240,000 of office furniture in exchange for $ 800,000 of capital stock. Exercise D For each of the following unrelated transactions, give the journal entry to record the transaction. Then show how the journal entry would be posted to T-accounts. You need not include explanations or account numbers. A. A revenue account is credited when it is increased.
- D. Issuing stock to investors increases cash, recorded with a debit, and increases common stock, recorded with a credit.
- 13 Purchased $ 240 of supplies on account for use in December.
- Jan 12 Purchased insurance for January on the delivery trucks.
- The below image is helpful to understand the format of a journal entry.
- For now, we are going to classify inventory purchases as an expense.
Journal Entry for Drawings (Cash)
Hence we can display it in the Assets category. Sales are https://www.bookstime.com/ a form of revenue, and hence we can place it in the Revenue category. Read the information and write a memo to your instructor about your search and what you learned about certain jobs in accounting. Prepare a corrected trial balance as of 2010 December 31. Also, write a description of the effect(s) of each error.
Example – Max Withdrew 1,000 in cash for personal use from his business. Example – Max started a business with 10,000 in cash. For your convenience, difficulty levels and time limits are stated for each of these exercises at the top of each page.
Watch the video below each practice quiz to see further explanation on how to solve these accounting practice questions. QuickBooks B. Using up the asset prepaid rent is an expense. An increase to an expense is recorded with a debit. Using an asset is also a decrease to the asset which is recorded with a credit. We’ve gone through 15 journal entry examples and explained how each are prepared to help you learn the art of recording. By now you’d feel more confident in preparing journal entries.
Bookkeeping (Practice Quiz)
The cost of the transaction analysis accounting policy, $ 800, was paid in cash. 8 Secured an order from a customer for laundry services of $ 7,000. The services are to be performed next month. 25 Laundry services were performed for customers who paid immediately, $ 22,000. 12 Performed delivery services for customers who promised to pay $ 27,000 at a later date.