Question

Q1. When amounts are correct, the accounting equation, Assets = Liabilities + Stockholders’ Equity, (_________ / will not) always be in balance. Similarly, Debits (_________/ will not) always equal Credits.
Q2. Assets are (_________/ credit) accounts, which are increased with a (_________/ credit) and decreased with a (debit / _________). Whereas, liabilities and stockholders’ equity are (debit / _________) accounts, which are increased with a (debit / _________) and decreased with a (_________/ credit).
Q3. Cash is a(n) (_________/ L / SE) account, which is a (_________/ credit) account, which is increased with a (_________/ credit). Therefore, to record an increase of $30,000 in cash, the journal entry should (_________/ credit) cash.
Q4. Common stock is a(n) (A / L / _________) account, which is a (debit / _________) account, which is increased with a (debit / _________). Therefore, to record an increase of $30,000 in common stock, the journal entry should (debit / _________) cash.
ASSETS = LIABILITIES + STOCKHOLDERS’ EQUITY
STOCKHOLDERS’ EQUITY = COMMON STOCK +
RETAINED EARNINGS
Beginning RETAINED EARNINGS + NET INCOME - DIVIDENDS =
Ending RETAINED EARNINGS
Beginning R/E + (REVENUE - EXPENSES) - DIVIDENDS = Ending RETAINED EARNINGS
Debit Accounts 
Credit Accounts 
Expenses 
Stockholders’ Equity 
Dividends 
Revenue 
Q5. Retained Earnings is increased by net income (revenues – expenses) and decreased by dividends. Hence, revenues (___________ / decrease) retained earnings whereas expenses and dividends (increase / ___________) retained earnings.
Q6. Retained Earnings is a Stockholders’ Equity account. Because revenue increases stockholders’ equity, revenue is recorded with a (debit / _________). Because expenses and dividends decrease stockholders’ equity, they are recorded with a (_________/ credit). In summary, revenue is increased with a credit and expenses and dividends are increased with a debit.
Debit Accounts 
Credit Accounts 
Assets 
Liabilities 
Expenses 
Stockholders’ Equity 
Dividends 
Revenues 
Q7. The events below occurred during July for Doogie’s Dog Grooming Corporation. For each transaction, record the appropriate journal entry. If an event is not a transaction, record “No Transaction.” Use the Chart of Accounts introduced in the previous Activity. Transaction #1 is completed for you.
Q8. Compute the ending balance of the cash account below, noting whether the balance is debited or credited.
Q9. Compute total debits and total credits and record in the last row below. Total debits are completed for you.
Q10. As a check to the accuracy of the postings, make certain that total debits equal total credits. If not, please find the error and correct. Do total debits equal total credits? (_________/ No)


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  • CreatedSeptember 17, 2015
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