Incurring an expense for advertising on account would be recorded by:

A) Debiting a liability account.

B) Crediting an asset account.

C) Debiting an expense account.

D) Debiting an asset account.

Answer: C

Tyler Incorporated receives $150,000 from investors in exchange for shares of its common stock. Tyler Incorporated records this transaction with a:

A) Debit to Investments.

B) Credit to Retained Earnings.

C) Credit to Common Stock.

D) Credit to Service Revenue.

Answer: C

The owner of an office building should report rent collected in advance as a debit to Cash and a credit to:

A) A liability.

B) An asset other than Cash.

C) Revenue.

D) Stockholders' equity.

Answer: A

Schooner Inc. purchased equipment by signing a note payable. This transaction would be recorded as:

A) Debit Equipment, credit Cash.

B) Debit Cash, credit Notes Payable.

C) Debit Notes Payable, credit Equipment.

D) Debit Equipment, credit Notes Payable.

Answer: D

When a company pays $2,500 dividends to its stockholders, the transaction should be recorded as:

A) Debit Cash; credit Dividends.

B) Debit Retained Earnings; credit Dividends.

C) Debit Dividends; credit Cash.

D) Debit Dividends; credit Accounts Payable.

Answer: C

Daniel Dino Restaurant owes employees' salaries of $15,000. This would be recorded as:

A) Debit Salaries Expense, credit Cash.

B) Debit Salaries Payable, credit Cash.

C) Debit Salaries Expense, credit Salaries Payable.

D) Debit Salaries Payable, credit Salaries Expense.

Answer: C

Jerome purchased a building for his business by signing a note to be repaid over the next ten years. Which of the following correctly describes how to record this transaction?

A) Debit assets, credit liabilities.

B) Debit assets, credit stockholders' equity.

C) Debit liabilities, credit assets.

D) Debit expenses, credit liabilities.

Answer: A