When a company pays utilities of $1,800 in cash, the transaction is recorded as:

A) Debit Utilities Expense $1,800, credit Utilities Payable $1,800.

B) Debit Utilities Payable $1,800, credit Cash $1,800.

C) Debit Cash $1,800, credit Utilities Expense $1,800.

D) Debit Utilities Expense $1,800, credit Cash $1,800.

Answer: D

Assume that cash is paid for rent to cover the next year. The appropriate debit and credit would be:

A) Debit Rent Expense, credit Cash.

B) Debit Prepaid Rent, credit Rent Expense.

C) Debit Prepaid Rent, credit Cash.

D) Debit Cash, credit Prepaid Rent.

Answer: C

Summer Leasing received $12,000 from a customer to cover 24 months of rent in advance. How should Summer record this transaction?

A) Debit Prepaid Rent; credit Rent Expense.

B) Debit Cash; credit Deferred Revenue.

C) Debit Cash; credit Service Revenue.

D) Debit Rent Expense; credit Cash.

Answer: B

Styleson Inc. performed cleaning services for its customers for cash. These transactions would be recorded as:

A) Debit Service Revenue, credit Cash.

B) Debit Cash, credit Service Revenue.

C) Debit Cash, credit Accounts Receivable.

D) Debit Accounts Receivable, credit Service Revenue.

Answer: B

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