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EB7. 3.4 Which two accounts are affected by each of the following transactions?
Account 1 Account 2
A. Received cash from issuance of common stock
B. Purchased land by issuing a note payable
C. Paid balance on account for last month’s inventory purchases
D. Received cash from customers for this month’s sales
E. Sold merchandise to customers on account
Table 3.11
EB8. 3.4 Identify the normal balance for each of the following accounts. Choose Dr for Debit; Cr for Credit.
Normal balance
A. Insurance Expense
B. Accounts Receivable
C. Office Supplies
D. Sales Revenue
E. Common Stock
F. Notes Payable
Table 3.12
Chapter 3 Analyzing and Recording Transactions 191
EB9. 3.4 Identify whether each of the following transactions would be recorded with a debit (Dr) or credit
(Cr) entry.
Debit or credit?
A. Cash decrease
B. Supplies increase
C. Accounts Payable decrease
D. Common Stock increase
E. Accounts Payable increase
F. Notes Payable increase
Table 3.13
EB10. 3.4 Identify whether each of the following transactions would be recorded with a debit (Dr) or credit
(Cr) entry.
Debit or credit?
A. Equipment increase
B. Dividends Paid increase
C. Repairs Expense increase
D. Service revenue increase
E. Miscellaneous Expense increase
F. Bonds Payable increase
Table 3.14
192 Chapter 3 Analyzing and Recording Transactions
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EB11. 3.4 Identify whether ongoing transactions posted to the following accounts would normally have only
debit entries (Dr), only credit entries (Cr), or both debit and credit entries (both).
Type of entry
A. Notes Payable
B. Accounts Receivable
C. Utilities Expense
D. Sales Revenue
E. Insurance Expense
F. Dividends
Table 3.15
EB12. 3.2 3.4 West End Inc., an auto mechanic shop, has the following account balances, given in no
certain order, for the quarter ended March 31, 2019. Based on the information provided, prepare West End’s
annual financial statements (omit the Statement of Cash Flows).
Prepare West End’s annual financial statements. (Omit the Statement of Cash Flows.)
EB13. 3.5 State whether the balance in each of the following accounts increases with a debit or a credit.
A. Office Supplies
B. Retained Earnings
C. Salaries Expense
D. Accounts Receivable
E. Service Revenue
Chapter 3 Analyzing and Recording Transactions 193
EB14. 3.5 Journalize each of the following transactions or state no entry required and explain why. Be sure
to follow proper journal writing rules.
A. A company is started with an investment of a machine worth $40,000. Common stock is received in
exchange.
B. Office furniture is ordered. The furniture worth $7,850 will be delivered in one week. The payment will
be due forty-five days after delivery.
C. An advertisement was run in the newspaper at a total cost of $250. Cash was paid when the order was
placed.
D. The office furniture is delivered.
E. Services are performed for a client. The client was billed for $535.
EB15. 3.5 Discuss how each of the following transactions will affect assets, liabilities, and stockholders’
equity, and prove the company’s accounts will still be in balance.
A. A company purchased $450 worth of office supplies on credit.
B. The company parking lot was plowed after a blizzard. A check for $75 was given to the plow truck
operator.
C. $250 was paid on account.
D. A customer paid $350 on account.
E. Provided services for a customer, $500. The customer asked to be billed.
EB16. 3.5 For each of the following items, indicate whether a debit or a credit applies.
A. increase in retained earnings
B. decrease in prepaid rent
C. increase in dividends
D. decrease in salaries payable
E. increase in accounts receivable
F. decrease in common stock
G. decrease in prepaid insurance
H. decrease in advertising expense
I. decrease in unearned service fees
J. increase in office equipment
EB17. 3.5 Indicate whether each of the following accounts has a normal debit or credit balance.
A. prepaid landscaping expense
B. common stock
C. delivery vans
D. maintenance expense
E. retained earnings
F. office supplies
G. revenue earned
H. accounts payable
I. unearned painting revenue
J. interest payable
194 Chapter 3 Analyzing and Recording Transactions
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EB18. 3.5 Krespy Corp. has a cash balance of $7,500 before the following transactions occur:
A. received customer payments of $965
B. supplies purchased on account $435
C. services worth $850 performed, 25% is paid in cash the rest will be billed
D. corporation pays $275 for an ad in the newspaper
E. bill is received for electricity used $235.
F. dividends of $2,500 are distributed
What is the balance in cash after these transactions are journalized and posted?
EB19. 3.5 A business has the following transactions:
A. The business is started by receiving cash from an investor in exchange for common stock $10,000.
B. Rent of $1,250 is paid for the first month.
C. Office supplies are purchased for $375.
D. Services worth $3,450 are performed. Cash is received for half.
E. Customers pay $1,250 for services to be performed next month.
F. $6,000 is paid for a one year insurance policy.
G. We receive 25% of the money owed by customers in “D”.
H. A customer has placed an order for $475 of services to be done this coming week.
How much total revenue does the company have?
EB20. 3.5 Prepare journal entries to record the following transactions.
A. November 19, purchased merchandise inventory, on account, $12,000
B. November 29, paid creditor for part of November 19 purchase, $10,000
EB21. 3.5 Prepare journal entries to record the following transactions:
A. December 1, collected balance due from customer account, $5,500
B. December 12, paid creditors for supplies purchased last month, $4,200
C. December 31, paid cash dividend to stockholders, $1,000
EB22. 3.5 Prepare journal entries to record the following transactions:
A. October 9, issued common stock in exchange for building, $40,000
B. October 12, purchased supplies on account, $3,600
C. October 24, paid cash dividend to stockholders, $2,500
EB23. 3.5 Post the following August transactions to T-accounts for Accounts Payable and Supplies,
indicating the ending balance (assume no beginning balances in these accounts):
A. purchased supplies on account, $600
B. paid vendors for supplies delivered earlier in month, $500
C. purchased supplies for cash, $450
EB24. 3.5 Post the following July transactions to T-accounts for Accounts Receivable and Cash, indicating
the ending balance (assume no beginning balances in these accounts):
A. sold products to customers for cash, $8,500
B. sold products to customers on account, $2,900
C. collected cash from customer accounts, $1,600
Chapter 3 Analyzing and Recording Transactions 195