Xenon Corporation borrows $75,000 from First Bank. Xenon Corporation records this transaction with a:

A) Debit to Investments.

B) Credit to Retained Earnings.

C) Credit to Notes Payable.

D) Credit to Interest Expense.

Answer: C

Childers Service Company provides services to customers totaling $3,000, for which it billed the customers. How would the transaction be recorded?

A) Debit Cash $3,000, credit Service Revenue $3,000.

B) Debit Accounts Receivable $3,000, credit Service Revenue $3,000.

C) Debit Accounts Receivable $3,000, credit Cash $3,000.

D) Debit Service Revenue $3,000, credit Accounts Receivable $3,000.

Answer: B

A company received a bill for newspaper advertising services, $400. The bill will be paid in 10 days. How would the transaction be recorded today?

A) Debit Advertising Expense $400, credit Accounts Payable $400.

B) Debit Accounts Payable $400, credit Advertising Expense $400.

C) Debit Accounts Payable $400, credit Cash $400.

D) Debit Advertising Expense $400, credit Cash $400.

Answer: A

Which of the following is the appropriate debit/credit format for recording a business transaction?

A. Credit Name Credit Amount

Debit Name Debit Amount

B. Debit Amount Debit Name

Credit Amount Credit Name

C. Debit Name Debit Amount

Credit Name Credit Amount

D. Credit Name Debit Amount

Debit Name Credit Amount

A) Option A

B) Option B

C) Option C

D) Option D

Answer: C

The following statements pertain to recording transactions. Which of them are true?

I. Total debits should equal total credits.

II. It is possible to have multiple debits or credits in one journal entry.

III. Assets are always listed first in journal entries.

IV. Some journal entries will have debits only.

A) I only.

B) I and II.

C) I, II, and IV.

D) II, III, and IV.

Answer: B

Which of the following is not a possible journal entry?

A) Credit assets; Debit expenses.

B) Debit assets; Debit stockholders' equity.

C) Credit revenues; Debit assets.

D) Debit expenses; Credit liabilities.

Answer: B

Providing services on account would be recorded with a:

A) Debit to Service Revenue.

B) Credit to Accounts Receivable.

C) Credit to Accounts Payable.

D) Debit to Accounts Receivable.

Answer: D