Question

    1.     In the first month of operations, the total of the debit entries to the cash account amounted to $1900 and the total of the credit entries to the cash account amounted to $800. The cash account has a balance of……………….

    2.     Dawson’s Delivery Service purchased equipment for $3,500. Dawson paid $500 in cash and signed a note for the balance. Dawson debited the Equipment account, credited Cash and

a.   debited the Dawson, Capital account for $2,000.

b.   credited another asset account for $500.

c.   credited a liability account for $3,000.

d.   nothing further must be done.

    3.     Grayton Industries purchased supplies for $1,200. They paid $500 in cash and agreed to pay the balance in 30 days. The journal entry to record this transaction would include a debit to an asset account for $1,200, a credit to a liability account for $700. Which of the following would be the correct way to complete the recording of the transaction?

a.   Credit another liability account for $500.

b.   Credit the Grayton, Capital account for $500.

c.   Debit the Grayton, Capital account for $500.

d.   Credit an asset account for $700.

    4.     On January 14, Franco Industries purchased supplies of $500 on account. The entry to record the purchase will include

a.   a debit to Supplies and a credit to Accounts Payable.

b.   a debit to Supplies Expense and a credit to Accounts Receivable.

c.   a debit to Supplies and a credit to Cash.

d.   a debit to Accounts Receivable and a credit to Supplies.

Answer 1

1) Cash account balance is 1900-800 = $1100

2) Journal entry :

Date	account and explanation	debit	credit
	Equipment	3500
	Cash		500
	Notes payable		3000

So answer is c) credited a liability account for $3,000.

3) Journal entry :

Date	account and explanation	debit	credit
	Supplies	1200
	Cash		500
	Account payable		700

so answer is a) Credit another liability account for $500.

4) Journal entry :

Date	account and explanation	debit	credit
	Supplies	500
	Account payable		500

So answer is a)  a debit to Supplies and a credit to Accounts Payable.