Question

1. Sara Smith invested $10,000 cash into her restaurant. Would the increase in cash be entered into the accounting records as a debit or credit? 2. Pete Willis purchased land costing $ 50,000 for his pizza shop. Would the increase in land be entered into the accounting records as a debit or credit? 3. Ralf Sails purchased $ 300 of supplies for his coffee shop. Would the increase in supplies be entered into the accounting records as a debit or credit? 4. Laura Cunningham paid her utility bill for the month of September. Would the utility expense account be entered into the accounting records as a debit or credit? 5. John Jones withdrew $ 2,000 cash from his automotive repair shop. Would the entry in the accounting records for the withdraw account be a debit or credit? 6. Kobi Lancing invested a $1,000 computer into his swimming pool cleaning business. Would the entry into the capital account be a debitor credit? 7. Mike Johnson mowed a lawn for a customer and was paid $ 30 cash. Would the entry into the accounting records for the revenue account be a debit or credit? 8. Larry Paulson purchased office supplies on account. Would the entry into the accounting records to accounts payable be a debit or credit? 9. Terry Freeland had $ 400 of office supplies at the beginning of September. When he counted office supply inventory at the end of September there was $ 100 of office supplies still left and available for use. How many dollars of office supplies were used in September? 10. Phil Starks purchased a delivery van for his catering business. The van cost $ 20,000. He put $ 2,000 down as a cash payment. How much was the loan he took out to purchase the delivery van?

Answer 1

1) Sama smith invested $10000 into her restaurant.So it will be a capital investment. So entry will be Cash debit and Capital credit.So increase in cash will be a debit in accounting records.

2)For Purchase of land journal entry will be Land debit and Cash will be credit. So increase in land will be a debit in accounting records.

3)Supplies purchased is an asset and hence should be debited in accounting records.So increase in supplies will be entered as debit in accounting records.

4)Utility bill is an expense and expenses are debited in the books. So utility bill expense will be entered as debit in accounting records.

5)Cash withdrawl from his repairs shop , the journal entry will be withdrawl accounts debit and cash account debit. So withdrawl amount will be entered as debit in the accounting records.

6)$1000 computer invested in business.Journal entry would be Computer account debit and Captial account credit.So entry in the capital account will be a credit.

7)Revenue has a credit balance.Journal entry will be Cash account debit and Revenue account credit. So entry in Revenue account will be a credit.

8) Account payable is a liability for business and hence it should have credit balance. Entry will be Supplies account debit and account payable credit.So entry to account payable would be a credit.

9)Beginning balance of office supplies is $400 and ending balance is $100. So supplies used is ( $400 - $100) = $300

So $300 of office supplies were used in September.

10) Cost of delivery van is $20000.Phil paid $2000 as down payment. So the balance amount is loan taken by phil. So amount of loan taken by Phil is $20000-$2000= $18000