1. Which of the statements of the rules of debit and credit is true?
A. Decrease accounts receivable with a credit and the normal balance is a credit.
B. Increase accounts payable with a credit and the normal balance is a credit.
C. Increase capital with a debit and the normal balance is a debit.
D. Decrease cash with a debit and the normal balance is a debit.
2. One asset would be debited and another credited if __________.
A. the business provided services to a cash customer
B. the business paid a creditor
C. the business bought supplies paying cash
D. the business provided services to a credit customer
3. What would be the effect on accounts if the owner withdrew cash?
A. An asset would be debited and an expense credited.
B. Withdrawals would be debited and an asset credited.
C. An asset would be debited and a revenue credited.
D. An asset would be debited and Capital credited.
6. An asset would be debited and a liability credited if __________.
A. the business bought supplies for cash
B. the business incurred an expense and paid it
C. the business incurred an expense and did not pay for the expense immediately
D. the business bought equipment on account
7. An account is said to have a debit balance if __________.
A. the footing of the debits exceeds the footing of the credits
B. there are more entries on the debit side than on the credit side
C. its normal balance is debit without regard to the amounts or number of entries on the debit side
D. the last entry of the accounting period was posted on the debit side
8. When recording transactions in two or more accounts and the totals of the debits and credits are equal, it is called __________.
A. debiting
B. crediting
C. posting
D. double-entry bookkeeping
9. The owner invested personal equipment in the business. To record this transaction __________.
A. debit Equipment and credit Accounts Payable
B. debit Accounts Payable and credit Equipment
C. debit Equipment and credit Capital
D. credit Equipment and debit Capital
10. Which of the following entries records the investment of cash by John, owner of a sole proprietorship?
A. debit John, Capital; credit Cash
B. debit Cash; credit John, Withdrawals
C. debit John, Withdrawals; credit Cash
D. debit Cash; credit John, Capital
11. When an owner records a credit for $650 for revenue earned but not yet received, the amount of the debit should be __________.
A. $325
B. $0
C. $975
D. $650
12. Which of the following types of accounts has a normal credit balance?
A. withdrawals
B. assets
C. expenses
D. revenues
13. The accounts payable account is __________.
A. a revenue, and it has a normal debit balance
B. an expense, and it has a normal credit balance
C. a liability, and it has a normal debit balance
D. a liability, and it has a normal credit balance
14. Jim Walton performed services on credit for $2,450. A debit for this transaction should be recorded to __________.
A. revenue
B. accounts receivable
C. accounts payable
D. cash
15. Office Supplies had a normal starting balance of $75. There were debit postings of $80 and credit postings of $60 during the month. The ending balance is __________.
A. $55 debit
B. $55 credit
C. $95 debit
D. $95 credit
16. Accounts Payable had a normal starting balance of $800. There were debit postings of $600 and credit postings of $300 during the month. The ending balance is __________.
A. $500 credit
B. $1,000 debit
C. $500 debit
D. $1,000 credit
17. The business incurred an expense and paid it immediately. To record this __________.
A. an expense is debited and a liability is credited
B. an expense is debited and an asset is credited
C. an expense is debited and Capital is credited
D. None of the above answers are correct.
18. A debit increases the balance in all of the following accounts, except __________.
A. cash
B. withdrawals
C. expenses
D. accounts payable
19. The beginning balance in the Computers account was $2,000. The company purchased an additional $1000 worth of computers. The balance in the account is __________.
A. debit of $2,000
B. credit of $3,000
C. debit of $3,000
D. credit of $2,000
20. The Accounts Receivable account has total debit postings of $1,900 and credit postings of $1100. The balance of the account is __________.
A. $800 debit
B. $800 credit
C. $2,600 credit
D. $2,600 debit