Answered: 1. Green Company buys a laptop computer…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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1. Green Company buys a laptop computer on credit for P72,000. The transaction will affect the: assets, liabilities and owner's equity, assets and liabilities only, liabilities and owner's equity only, or assets only?

2. An accountant has debited an asset account for P1,000 and credited a liability account for P500. Which of the following would be an incorrect way to complete the recording of the transaction?

a. credit an owner's equity account for P500

b. credit an asset account for P500

c. debit an owner's equity account for P500

d. credit another liability account for P500

3. An entry to record the owner's initial cash investment P500,000 will require a:

a. credit to Capital account for P500,000

b. Debit to Capital account for P500,000

c. credit to Cash account for P500,000

d. Debit to Loans Payable account for P500,000

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