Question

For each transaction described below, write the name of the account that would be debited and the name of the account that would be credited when recording the transaction.

Company purchased inventory on account
Company sold/provided services for cash
Company recorded depreciation on equipment for the period
Company paid NEXT YEAR’s insurance premium
Company paid vendor for a prior purchase on account
Company paid utility bill
Company received cash deposit from customer for work to be performed in the future
Company received payment on previous sale made on account
Company purchased machinery with a note
Company issued a bond at face value
Company paid interest due on bond issued at face value
Company issued common stock at par value
Company issued common stock at par value in exchange for a building
Company declared a dividend on common stock
Company paid a previously declared dividend on common stock
Company disposed of equipment that was fully depreciated (no residual)
Company uses the percent of sales method and records estimated bad debts.
Company recorded closing entry for revenue account
Company recorded closing entry for expense account
Company’s bank statement indicated a service charge that had not previously been recorded

Answer 1

Answer

	To Record the Transaction in a Journal Entry, Name the Accounts that you would debit and credit
Transaction	Account to Debit
Company purchased inventory on account	Inventory	Accounts payable
Company sold/provided services for cash	Cash	Revenue
Company recorded depreciation on equipment for the period	Depreciation expense	Accumulated depreciation-Equipment
Company paid NEXT YEAR’s insurance premium	Prepaid insurance	Cash
Company paid vendor for a prior purchase on account	Accounts payable	Cash
Company paid utility bill	Utilities expense	Cash
Company received cash deposit from customer for work to be performed in the future	Cash	Unearned revenue
Company received payment on previous sale made on account	Cash	Accounts receivable
Company purchased machinery with a note	Machinery/Equipment	Note payable
Company issued a bond at face value	Cash	Bonds payable
Company paid interest due on bond issued at face value	Interest expense	Cash
Company issued common stock at par value	Cash	Common stock
Company issued common stock at par value in exchange for a building	Building	Common stock
Company declared a dividend on common stock	Dividends	Dividend payable
Company paid a previously declared dividend on common stock	Dividend payable	Cash
Company disposed of equipment that was fully depreciated (no residual)	Accumulated depreciation	Equipment
Company uses the percent of sales method and records estimated bad debts.	Bad debt expense	Allowance for doubtful accounts
Company recorded closing entry for revenue account	Revenue	Retained earnings
Company recorded closing entry for expense account	Retained earnings	Expenses
Company’s bank statement indicated a service charge that had not previously been recorded	Service charge expense	Cash