Problem 1. Taylor Industries purchased supplies for $1,000. They paid $500 in cash and agreed to pay the balance in 30 days. The journal entry to record this transaction would include a debit to an asset account for $1,000, a credit to a liability account for $500. Which of the following would be the correct way to complete the recording of the transaction?
- Credit the Taylor, Capital account for $500.
- Credit an asset account for $500.
- Credit another liability account for $500.
- Debit the Taylor, Capital account for $500.
Problem 2. The collection of a $900 account after the 2 percent discount period will result in a
- debit to Cash for $900.
- debit to Sales Discounts for $18.
- debit to Cash for $882.
- debit to Accounts Receivable for $900.
Problem 3. On June 1, 2010 Quang Le buys a copier machine for his business and finances this purchase with cash and a note. When journalizing this transaction, he will
- make a simple entry.
- list the credit entries first, which is proper form for this type of transaction.
- use two journal entries.
- make a compound entry.