Question

Transaction Analysis: Match each of the following transactions of L. Boyd & Company with the appropriate letters, indicating the debits and credits to be made. The key for the letters follows the list of transactions.

1. Stockholders contributed cash to the business. Example Answer: A and F

2. Purchased equipment on account.

3. Received and immediately paid advertising bill.

4. Purchased supplies for cash.

5. Borrowed money from a bank, giving a note payable.

6. Billed customers for services rendered.

7. Made a partial payment on account for equipment.

8. Paid employee’s salary.

9. Collected amounts due from customers billed in Transaction 6.

Financial Effect of Transaction (Each answer will include 2 of the options below)

a. Debit an asset

b. Credit an asset

c. Debit a liability

d. Credit a liability

e. Debit common stock

f. Credit common stock

g. Debit a revenue

h. Credit a revenue

i. Debit an expense

j. Credit an expense

Answer 1

ANSWER

1. Stockholders contributed cash to the business. Answer: A and F

2. Purchased equipment on account. Answer: A and D

3. Received and immediately paid advertising bill. Answer: B and I

4. Purchased supplies for cash. Answer: B and I

5. Borrowed money from a bank, giving a note payable. Answer: A and D

6. Billed customers for services rendered. Answer: A and H

7. Made a partial payment on account for equipment. Answer: B and C

8. Paid employee’s salary. Answer: B and I

9. Collected amounts due from customers billed in Transaction 6. Answer: A and B