Reference no: EM13337404
Question
1. R. Sparks, an interior decorator, started a business by investing $10,000 cash. The business would record this transaction:
a. Debit Cash $10,000, Credit Revenue $10,000
b. Debit Cash $10,000, Credit R. Sparks, Capital $10,000
c. Credit Cash $10,000, Debit R. Sparks, Capital $10,000
d. Credit Cash $10,000, Debit Revenue $10,000
2. R Sparks business purchases a used car for $6,000 cash. The business would record this transaction:
a. Debit Car expense $6,000, Credit Cash $6,000
b. Debit Cash 6,000, Credit Car expense $6,000
c. Debit Assets: car $6,000, Credit Cash $6,000
d. Debit Cash $6,000, Credit Assets: car $6,000
3. R. Sparks business purchases a one year liability insurance policy effective immediately for $1,200 cash. The business would record this transaction:
a. Debit Asset: Prepaid insurance $1,200, Credit cash $1,200
b. Debit Insurance expense $1,200, Credit cash $1,200
c. Debit Cash $1,200, Credit Prepaid Insurance $1,200
d. Debit Cash $1,200, Credit Insurance Expense $1,200
4. R. Sparks business purchases six months of supplies on account for $550. The business would record this transaction:
a. Debit Supplies Expense $550, Credit Cash $550
b. Debit Supplies Expense $550, Credit Accounts Payable $550
c. Debit Asset: Supplies $550, Credit Cash $550
d. Debit Asset: Supplies $550, Credit Accounts Payable $550
5. R. Sparks business billed customers $2,100 for services performed. The business would record this transaction:
a. Debit Accounts Receivable $2,100, Credit Service Revenues $2,100
b. Debit Cash $2,100, Credit Service Revenues $2,100
c. Debit Service Revenues $2,100, Credit Cash $2,100
d. Debit Service Revenues $2,100, Credit Accounts Receivable $2,100
6. R. Sparks withdrew from his business $300. The business would record this transaction:
a. Debit Cash $300, Credit Draws $300
b. Debit Draws $300, Credit Cash $300
c. Debit Draw expense $300, Credit Cash $300
d. Debit Cash $300, Credit Accounts Payable $300
7. R. Sparks business received payment from customers previously billed $1,000. The business would record this transaction:
a. Debit Cash $1,000, Credit Accounts Receivable $1,000
b. Debit Cash $1,000, Credit Accounts Payable $1,000
c. Debit Accounts receivable $1,000, Credit Service revenue $1,000
d. Debit Service revenue $1,000, Credit Cash $1,000.
8. R. Sparks business received $800 cash in advance for services to be performed next quarter.
The business would record this transaction:
a. Debit Accounts Receivable $800, Credit Unearned Revenue $800
b. Debit Cash $800, Credit Earned Revenue $800
c. Debit Cash $800, Credit Unearned revenue $800
d. Debit Unearned revenue $800, Credit Cash $800
9. R. Sparks business had purchased office supplies for $1,000 and had recorded the purchase as Asset: Office Supplies. At month end, when preparing the financial statements, an inventory shows that $700 of office supplies is still on hand.
The business would record and adjusting entry for this transaction:
a. Debit Office supplies expense $700, credit Asset: Office Supplies $700
b. Debit Office supplies expense $300, credit Asset: Office Supplies $300
c. Debit Asset: Office supplies $700, Credit Office supplies expense $700
d. Debit Asset: Office supplies $300, Credit Office supplies expense $700
10. R. Sparks business had purchased a one year insurance policy for $1,200. The business had recorded the cost of $1,200 to the asset: Prepaid Insurance. An adjusting entry for the one month expiration of insurance would be:
a. Debit Prepaid Insurance $1,200, Credit Cash $1,200
b. Debit Prepaid Insurance $1,200, Credit Insurance expense $1,200
c. Debit Insurance expense $100, Credit Prepaid Insurance $100
d. Debit Prepaid Insurance $100, Credit Insurance expense $100