Q1- The terms debit and credit mean increase and decrease, respectively. Is this true? Explain why or why not.

Q2- What are the basic steps in the recording process?

Q3- AP Selected transactions for Bonnie Donne Company during its first month in business are as follows:

September.

1 Invested $10,000 cash in the business.

5 Purchased equipment for $14,000 paying $4,000 in cash and the balance on account.

25 Paid $3,000 cash on balance owed for equipment.

30 Withdrew $900 cash for personal use.

Instructions

1. Journalize the transactions on page J1 of the journal. (Omit explanations.)
2. Post the transactions using the standard account form.
3. Analyse errors and their effects on trial balance.

Q4- The bookkeeper for J.L. Kang Equipment Repair made a number of errors in journalizing and posting, as the following describes.

1. A credit posting of $525 to Accounts Receivable was omitted.
2. A debit posting of $750 for Prepaid Insurance was debited to Insurance Expense.
3. A collection from a customer of $100 in payment of its account owed was journalized and posted as a debit to Cash $100 and a credit to Service Revenue $100.
4. A credit posting of $415 to Property Taxes Payable was made twice.
5. A cash purchase of supplies for $250 was journalized and posted as a debit to Supplies $25 and a credit to Cash $25.
6. A debit of $625 to Advertising Expense was posted as $652.

Instructions

For each error:

1. Indicate whether the trial balance will balance.
2. If the trial balance will not balance, indicate the amount of the difference.
3. Indicate the trial balance column that will have the larger total. Consider each error separately.
4. Prepare a trial balance.