Posting to the General Ledger
Post the following transaction: Owner invests $5,000 cash into the business.
Debit Cash $5,000; Credit Owner's Capital $5,000.
Journalize the purchase of office equipment for $2,000 cash.
Debit Office Equipment $2,000; Credit Cash $2,000.
Correct the entry: Utilities Expense was debited for $200 instead of $250.
Debit Utilities Expense $50; Credit Cash $50.
What is the "T" in T-Account meant to represent?
The "T" represents the shape of the account, with the left side used for debits and the right side used for credits.
What is the basic form of the accounting equation?
Assets = Liabilities + Owner's Equity.
Post a $300 payment for office supplies.
Debit Office Supplies $300; Credit Cash $300.
Journalize a $500 cash withdrawal by the owner.
Debit Owner's Drawings $500; Credit Cash $500.
Correct the entry: Equipment was debited for $1,500 instead of $1,000.
Credit Equipment $500; Debit Cash $500.
On which side of a T-Account would you record an increase in an asset account?
On the left side (debit side).
If a company purchases equipment for $2,000 in cash, how does this affect the accounting equation (not the accounts, but the equation)?
Assets increase by $2,000 (Equipment) and decrease by $2,000 (Cash), so the overall effect on the accounting equation is neutral.
Post a $1,200 sale on account.
Debit Accounts Receivable $1,200; Credit Sales Revenue $1,200.
Journalize the receipt of $800 from a customer for services performed.
Debit Cash $800; Credit Service Revenue $800.
Correct the entry: Sales Revenue (made on account) was credited for $900 instead of $1,000.
Debit Sales Revenue $100; Credit Accounts Receivable $100.
If you record a $500 credit in the Accounts Payable T-Account, what type of transaction could this represent?
It could represent an increase in liability, such as purchasing goods or services on credit.
A company takes out a $5,000 loan from the bank. How does this transaction affect the accounting equation?
Assets increase by $5,000 (Cash), and Liabilities increase by $5,000 (Loan Payable).
Post a $600 payment to creditors.
Debit Accounts Payable $600; Credit Cash $600.
Journalize the payment of a $150 utility bill.
Debit Utilities Expense $150; Credit Cash $150.
Correct the entry: Rent Expense was debited and Cash was credited for $400 instead of $600.
Debit Rent Expense $200; Credit Cash $200.
In a T-Account, what does a balance on the debit side signify for an asset account?
A balance on the debit side signifies that the asset account has a positive balance or increase in assets.
How does the payment of $1,000 in salaries to employees affect the accounting equation?
Assets decrease by $1,000 (Cash), and Owner's Equity decreases by $1,000 (Salaries Expense reduces Net Income, which reduces Retained Earnings).
Post the depreciation of equipment for $400.
Debit Depreciation Expense $400; Credit Accumulated Depreciation $400.
Journalize the purchase of $1,000 of inventory on account.
Debit Inventory $1,000; Credit Accounts Payable $1,000.
Correct the entry: Wages Expense of $800 was mistakenly recorded as a debit to Wages Payable and a credit to Cash.
Debit Wages Expense $800; Credit Wages Payable $800; Debit Wages Payable $800; Credit Cash $800.
A company records a $1,000 debit to the Cash T-Account and a $1,000 credit to the Service Revenue T-Account. What does this transaction represent?
This transaction represents receiving cash for services provided, increasing both Cash (an asset) and Service Revenue (revenue).
A company provides services worth $3,000 on account. How does this transaction affect the accounting equation?
Assets increase by $3,000 (Accounts Receivable), and Owner's Equity increases by $3,000 (Service Revenue increases Net Income, which increases Retained Earnings).