Name That Category
Which category of accounts represents things the business owns or controls?
Assets
What is the natural balance of an Asset account: debit or credit?
Debit
The owner contributes $10,000 cash to start the business. Which two accounts are affected?
Cash at Bank and Capital
Which side of a T-account is the debit side?
Left
Which category of accounts does Bank Loan belong to?
Liability
What is the natural balance of a Revenue account?
Credit
The business pays $600 for advertising. Which two accounts are affected?
Advertising Expense and Cash at Bank
A Cash at Bank ledger has $10,000 debit and $3,000 credit entries. What is its balance?
$7,000 debit
Classify each account: Sales Revenue, Rent Expense, Equipment.
Revenue, Expense, Asset
Accounts Payable decreases. Is Accounts Payable debited or credited?
Debited
The business purchases equipment for $4,000 cash. Identify the two accounts and whether each increases or decreases.
Equipment ↑; Cash at Bank ↓
A Bank Loan account begins with a $15,000 credit balance. The business repays $4,000. What is the new balance?
$11,000 credit
A business has Assets of $80,000 and Liabilities of $35,000. Using the accounting equation, calculate Owner’s Equity.
$45,000
Cash at Bank increases while Revenue increases. Which account is debited and which is credited?
Dr Cash at Bank; Cr Revenue
The business purchases $2,500 of equipment on credit from Office Solutions. Identify the accounts, their category and whether they increase/decrease.
Equipment — Asset ↑;
Accounts Payable — Liability ↑
A Cash at Bank ledger has a $15,000 debit balance. The business then receives $4,500 cash revenue and pays $6,200 for expenses. What is the new balance of the Cash at Bank account?
$13,300 debit balance.
A business earns $4,000 Revenue and incurs $1,500 Expenses. What effect does this have on Owner’s Equity?
Owner’s Equity increases by $2,500
The business pays $2,000 off a bank loan. Without preparing the full journal entry, explain which account is debited and which is credited.
Dr Bank Loan; Cr Cash at Bank
A customer who previously owed the business $1,800 pays the full amount. Identify the two accounts, their elements, whether they increase/decrease, and their debit/credit treatment.
Cash at Bank — Asset ↑ — Dr;
Accounts Receivable — Asset ↓ — Cr
Cash at Bank has a $12,000 Dr balance, Equipment $8,000 Dr, Rent Expense $2,000 Dr, Bank Loan $7,000 Cr, and Capital $15,000 Cr. Does the trial balance balance?
Yes. Debits = $22,000 and Credits = $22,000.