Page 102 - Accounting Principles (A Business Perspective)

This book is licensed under a Creative Commons Attribution 3.0 License

a. Debit Cash, credit Unearned Delivery Fees.
b. Debit Cash, credit Delivery Fee Revenue.
c. Debit Accounts Receivable, credit Delivery Fee Revenue.

d. None of the above.
A company performed delivery services for a customer for cash. The correct debit and credit are:
a. Debit Cash, credit Unearned Delivery Fees.
b. Debit Cash, credit Delivery Fee Revenue.
c. Debit Accounts Receivable, credit Delivery Fee Revenue.
d. None of the above.
A cash dividend of USD 500 was declared and paid to stockholders. The correct journal entry is:

a. Capital stock 500
Cash 500
b. Cash 500
Dividends 500
c. Dividends 500
Cash 500
d. Cash 500
Capital stock 500
Now turn to “Answers to self-test” at the end of the chapter to check your answers.
Questions

➢ Describe the steps in recording and posting the effects of a business transaction.
➢ Give some examples of source documents.
➢ Define an account. What are the two basic forms (styles) of accounts illustrated in the chapter?

➢ What is meant by the term double-entry procedure, or duality?
➢ Describe how you would determine the balance of a T-account.
➢ Define debit and credit. Name the types of accounts that are:
➢ Increased by a debit.
➢ Decreased by a debit.
➢ Increased by a credit.
➢ Decreased by a credit.
➢ Do you think this system makes sense? Can you conceive of other possible methods for recording
changes in accounts?

➢ Which of the steps in the accounting cycle are performed throughout the accounting period?
➢ Which of the steps in the accounting cycle are performed only at the end of the accounting period?
➢ Why are expense and revenue accounts used when all revenues and expenses could be shown directly
in the Retained Earnings account?
➢ What is the purpose of the Dividends account and how is it increased?
➢ Are the following possibilities conceivable in an entry involving only one debit and one credit? Why?

➢ Increase a liability and increase an expense.
➢ Increase an asset and decrease a liability.
➢ Increase a revenue and decrease an expense.
➢ Decrease an asset and increase another asset.

Accounting Principles: A Business Perspective 103 A Global Text