Fundamental of Accounting

BBA-1 Quiz No. 1 Date: 06 Nov 2018

1. Use the following information for questions 3 through 6:
A company using the accrual method of accounting performed services on account in August. The services
were for $2,000 and the company gave the customer credit terms that state the amount is to be paid to the
company in September.
a. Assuming that the company prepares monthly income statements, what will be the account debited for
$2,000 in August? Cash Accounts Receivable Service Revenue
b. Which account should the company credit for $2,000 in August?
Cash Accounts Receivable Service Revenue
2. To increase the balance in the following accounts, would you debit the account or would you credit the
account?
i. Accounts Payable Debit Credit
ii. Cash Debit Credit
iii. Land Debit Credit
iv. Notes Payable Debit Credit
v. Accounts Receivable Debit Credit
vi. Mary Smith, Capital Debit Credit
vii. Supplies Debit Credit
viii.Supplies Expense Debit Credit
x. Service Revenue Debit Credit
xi. Mary Smith, Drawing Debit Credit
xii. Equipment Debit Credit

Journalize the following Transactions

Transaction #1: On December 1, 2017, Mr. Donald Gray started Gray Electronic Repair Services by investing
$10,000.
Transaction #2: On December 5, Gray Electronic Repair Services paid registration and licensing fees for the
business, $370.
Transaction #3: On December 6, the company acquired tables, chairs, shelves, and other fixtures for a total of
$3,000. The entire amount was paid in cash.
Transaction #4: On December 7, the company acquired service equipment for $16,000. The company paid a
50% down payment and the balance will be paid after 60 days.
Transaction #5: On December 14, Mr. Gray invested an additional $3,200.00 into the business. The entry
would be similar to what we did in transaction #1, i.e. increase cash and increase the capital account of the
owner.
Transaction #6: On December 25, the owner withdrew cash due to an emergency need. Mr. Gray withdrew
$7,000 from the company.