Transaction analysis – Fill in the blanks

1. John starts business with $100,000 cash. The John's capital account will be .

2. John purchases supplies for $500 cash. The supplies account will be .

3. John purchases merchandise for $5,000 on account. The account will be credited.

4. Merchandise are sold to a customer on account. The sales account will be .

5. $4,800 cash is paid to a creditor and a cash discount of $200 is received from him. The accounts payable will be debited by .

6. $800 cash is paid to a worker as his monthly salary. The account to be debited is .

7. Supplies costing $100 are used during the month. account will be debited and supplies account will be credited.

8. Accounts in which transactions relating to individuals or organizations are recorded are known as .

9. account is debited when owner of the business withdraws cash or an other asset for his personal use.

10. Classification of accounts as real, nominal and personal accounts is known as .

11. Classification of accounts as assets, liabilities, capital, revenues, and expenses is known as .

12. accounts are temporary accounts and are closed at the end of the accounting period.

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13. A process that involves finding the names and nature of accounts in a transaction and applying the rules of debit and credit on those accounts is known as .

14. When revenue/income is earned, its account is .

15. are also known as balance sheet accounts.

16. When an expense is incurred. Its account is .

17. An increase in liability is .

18. An increase in asset is .

19. A decrease in liability is .

20. A decrease in asset is .

21. Under double entry system of book-keeping, every transaction has aspects.

22. Every debit has a .

4 thoughts on “Transaction analysis – Fill in the blanks”

  1. 1- John starts business with $100,000 cash. The John’s capital account will be credited by 100,000.
    2- John purchases supplies for $500 cash. The supplies account will be debited.
    3- John purchases merchandise for $5,000 on account. The accounts payable account will be credited.
    4- Merchandise are sold to a customer on account. The sales account will be credited.
    5- $4,800 cash is paid to a creditor and a cash discount of $200 is received from him. The accounts payable will be debited by $5,000.
    6- $800 cash is paid to a worker as his monthly salary. The account to be debited is salary.
    7- Supplies costing $100 are used during the month. Supplies expense account will be debited and supplies account will be credited.
    8- Accounts in which transactions relating to individuals or organizations are recorded are known as personal accounts.
    9- $800 cash is paid to a worker as his monthly salary. The account to be debited is salary.
    10- Classification of accounts as real, nominal and personal accounts is known as traditional/British classification
    11- Classification of accounts as assets, liabilities, capital, revenues, and expenses is known as modern/American classification.
    12- Nominal accounts are temporary accounts and are closed at the end of the accounting period.
    13- A process that involves finding the names and nature of accounts in a transaction and applying the rules of debit and credit on those accounts is known as analysis of transaction.
    14- When revenue/income is earned, its account is credited
    15- Real accounts are also known as balance sheet accounts.
    16- When an expense is incurred. Its account is debited.
    17- An increase in liability is credited
    18- An increase in asset is debited.
    19- A decrease in liability is debited.
    20- A decrease in asset is credited.
    21- Under double entry system of book-keeping, every transaction has two aspects.
    22- Every debit has a credit.

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