Question 1

Analyse the following transactions in terms of their effect on the basic accounting equation. Record each transaction by increasing (+) or decreasing (-) the dollar amount of each item affected. Indicate the new balance of each item after a transaction is recorded.
1. Issued shares to investors for $12,000 in cash.
2. Purchased supplies on credit for $700.
3. Invoiced customers $400 for services provided.
4. Paid for supplies purchased in transaction 2.
5. Paid dividends of $300 cash to shareholders.
6. Received half of amount owing by customers invoiced in transaction 3.
7. Received and paid electricity bill for $50.

Accepted Answer

The answer of Analyse the following transactions in terms of...

Question 2

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account.
-An increase in Salary expense.

Accepted Answer

An increase in Salary expense is recorded as a debit because expenses increase with debits and decrease with credits in a double-entry accounting system.

Question 3

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account.
-A decrease in Accounts payable.

Accepted Answer

A decrease in Accounts Payable is recorded as a debit because Accounts Payable is a liability account, and liabilities decrease on the debit side.

Question 4

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account.
-An increase in Prepaid insurance.

Accepted Answer

An increase in Prepaid Insurance is recorded as a debit because Prepaid Insurance is an asset account, and increases in asset accounts are recorded as debits in a double-entry accounting system.

Question 5

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account.
-An increase in Share capital.

Accepted Answer

An increase in Share Capital is recorded as a credit because it increases the equity of the company. In double-entry accounting, credits increase equity, liability, and revenue accounts.

Question 6

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account.
-A decrease in Office supplies.

Accepted Answer

A decrease in office supplies, which is an asset account, is recorded as a credit in a double-entry accounting system.

Question 7

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account.
-An increase in Dividends paid

Accepted Answer

Dividends paid increase with a debit because they represent a distribution of earnings to shareholders, reducing retained earnings, which is an equity account. In double-entry accounting, increases in expense and distribution accounts are recorded as debits.

Question 8

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account.
-An increase in Service revenue.

Accepted Answer

An increase in Service Revenue is recorded as a credit in the ledger under a double-entry accounting system, as revenue increases equity.

Question 9

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account.
-A decrease in Accounts receivable.

Accepted Answer

A decrease in Accounts Receivable is recorded as a credit because Accounts Receivable is an asset account, and decreases in asset accounts are recorded as credits in a double-entry accounting system.

Question 10

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account.
-An increase in Rent expense.

Accepted Answer

An increase in Rent expense is recorded as a debit because expenses increase with debits and decrease with credits in a double-entry accounting system.

Question 11

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account.
-A decrease in Store equipment.

Accepted Answer

A decrease in an asset account, such as Store Equipment, is recorded as a credit in a double-entry accounting system.

Question 12

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have:
-Advertising expense

Accepted Answer

Advertising expense, like other expenses, typically has debit entries when the expense is incurred, increasing the total expense.

Question 13

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have:
-Service revenue

Accepted Answer

Service revenue typically has credit entries only, as it increases the company's income.

Question 14

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have:
-Accounts payable

Accepted Answer

Accounts payable can have both debit and credit entries. Credits occur when a business incurs obligations or purchases goods or services on credit, increasing the accounts payable. Debits are made to accounts payable when these obligations are paid off, decreasing the accounts payable balance.

Question 15

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have:
-Accounts receivable

Accepted Answer

Accounts receivable typically have both debit and credit entries. Debit entries occur when a business sells goods or services on credit, increasing the accounts receivable balance. Credit entries happen when a customer pays their invoice, decreasing the accounts receivable balance.

Question 16

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have:
-Share capital

Accepted Answer

Share capital typically has credit entries only, as it represents the equity provided by shareholders to the company. Increases in share capital are recorded as credits, and it is unusual for share capital to decrease, which would be recorded as a debit.

Question 17

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have:
-Dividends

Accepted Answer

Dividends typically have debit entries only, as they represent distributions of earnings to shareholders, reducing retained earnings.

Question 18

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have:
-Cash

Accepted Answer

Cash accounts typically have both debit and credit entries. Debits increase the cash balance (e.g., receiving cash from customers), while credits decrease it (e.g., paying cash to suppliers).

Question 19

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have:
-Salaries expense

Accepted Answer

Salaries expense is typically associated with debit entries, as it represents an expense to the business, increasing the expense account.

Question 20

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have:
-Loan payable

Accepted Answer

Loan payable accounts typically have both debit and credit entries. Credits occur when loans are taken or increased, and debits occur when payments are made towards the loan.

Quiz 2: The Recording Process

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account. -An increase in Salary expense.

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account. -A decrease in Accounts payable.

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account. -An increase in Prepaid insurance.

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account. -An increase in Share capital.

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account. -A decrease in Office supplies.

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account. -An increase in Dividends paid

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account. -An increase in Service revenue.

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account. -A decrease in Accounts receivable.

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account. -An increase in Rent expense.

Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account. -A decrease in Store equipment.

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have: -Advertising expense

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have: -Service revenue

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have: -Accounts payable

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have: -Accounts receivable

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have: -Share capital

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have: -Dividends

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have: -Cash

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have: -Salaries expense

During an accounting period, a business has numerous transactions affecting each of the following accounts. Select for each account what it is likely to have: -Loan payable