Question Details

Which of the following transactions decreases both assets and owner's equity 



1.	When a company receives an electric bill but does not pay it right away, what is the required journal entry to be recorded?
a.	Utilities Expense - Debit; Accounts Receivable - Credit
b.	No entry is required until the bill is paid.
c.	Utilities Expense - Debit; Accounts Payable - Credit
d.	Accounts Payable - Debit; Utilities Expense - Credit



	2.	When a magazine company receives advance payment for a subscription, what is the required journal entry to be recorded?
a.	Cash - Debit; Unearned Subscriptions Revenue - Credit
b.	Prepaid Subscriptions - Debit; Cash - Credit
c.	Cash - Debit; Subscriptions Revenue - Credit
d.	Unearned Subscriptions Revenue - Debit; Cash - Credit



	3.	When a service has been performed, but no cash has been received, which of the following statements is true?
a.	The entry would include a debit to Accounts Receivable.
b.	No journal entry would be made.
c.	The entry would include a debit to Accounts Payable.
d.	The entry would include a credit to Unearned Revenue.



	4.	Which of the following transactions decreases both assets and owner's equity ?
a.	Withdrawal of cash by the owner
b.	Advance payment made for insurance
c.	Receipt of a phone bill, to be paid at a later time
d.	Payment of a liability



	5.	A $4,000 machine is purchased by paying $1,000 cash and issuing a promissory note for the remainder. The journal entry should include a
a.	credit to Machinery.
b.	credit to Notes Payable.
c.	credit to Notes Receivable.
d.	debit to Cash.



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