Amalia Company received its utility bill for the current period of $700 and immediately paid it. Its journal entry to record this transaction includes a Credit to Utility Expense for $700. Debit to Utility Expense for $700. Debit to Accounts Payable for $700. Debit to Cash for $700. Credit to capital for $700.

Question

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Answer 1

Textbook Question

Chapter 2, Problem 1MCQ

Amalia Company received its utility bill for the current period of $700 and immediately paid it. Its journal entry to record this transaction includes a

Credit to Utility Expense for $700.
Debit to Utility Expense for $700.
Debit to Accounts Payable for $700.
Debit to Cash for $700.
Credit to capital for $700.

Expert Solution & Answer

To determine

Journal Entry: It refers to the process of recording the data into books of accounts on continuous basis. It is a process of record keeping for every transaction by a company or a firm.

Rules of Journal Entry: The rules for journal entry are defined by five accounting components,

Assets: Increase in asset should be debit and decrease should be credit.
Liabilities: Increase in liabilities should be credit and decrease should be debit.
Equity: Increase in Equity should be credit and decrease should be debit.
Expense: Increase in expense should be debit and decrease should be credit.
Revenue: Increase in revenue should be credit and decrease should be debit.

To Identify: Correct statement from given statements.

Answer:

Option b, debit to utility expense for $700 is the correct option.

Explanation of Solution

Option b.

Since, increase in expense reduces equity of a company, it should be debited.

Option a.

Since, increase in expense reduces equity of a company, it should be debited.

Option c.

Since, accounts payable is a short term liability and increase overall liability when it increases, it should be credited.

Option d.

Since, cash is an asset and decrease overall asset when it reduces, it should be credited.

Option e.

Since, there is no effect on the common stock in the given transaction, it should remain same.

Conclusion

Thus, the correct option is b.

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Wayward had the following general ledger account balances as of dinom od anitub soul sloo nois September 1:gniwollo 02.12 16 x61 aula 252d? > Account Title UDA 01e2 to xa aulq 25.802 volbu x61 aul 20.0612 to xn1 auiq xzul 2012 gaim Cash Accounts Receivable Notes Payable Sales Tax Payable Sales di bal old Sales Returns and Allowances Boarding and Grooming Revenue No. 101 122 201 231 401 8 401.1 402 General Ledger Balance on Sept. 1 $23,500.25 850.75 2,500.00 909.90 13,050.48 86.00 ni 109leb ionim suo to 161012 Wayward also had the following accounts receivable ledger balances a esisz benotto ebraic pT E01.oof September 1: bailaita doirw good to g 63 enla Customer ama 2 lo xet aulq 00S, 12, wed? yll Rosa Alanso ebo baid Gil wolks 2541 East 2nd Street 02 Accounts Receivable Balance Bloomington, IN 47401-5356 .85.22 10 x3 grtibuloni 85.892 Ed Cochran $456.00 01 20lse das 21 $ 63.25 2669 Windcrest Drive 25.822 voleu A Bloomington, IN 47401-5446 XEJ 2uiq 262229sive animoog bos bisod 101 des…

I am trying to find the accurate solution to this general accounting problem with the correct explanation.

Answer 2

Textbook Question

Chapter 2, Problem 1MCQ

Amalia Company received its utility bill for the current period of $700 and immediately paid it. Its journal entry to record this transaction includes a

Credit to Utility Expense for $700.
Debit to Utility Expense for $700.
Debit to Accounts Payable for $700.
Debit to Cash for $700.
Credit to capital for $700.

Expert Solution & Answer

To determine

Journal Entry: It refers to the process of recording the data into books of accounts on continuous basis. It is a process of record keeping for every transaction by a company or a firm.

Rules of Journal Entry: The rules for journal entry are defined by five accounting components,

Assets: Increase in asset should be debit and decrease should be credit.
Liabilities: Increase in liabilities should be credit and decrease should be debit.
Equity: Increase in Equity should be credit and decrease should be debit.
Expense: Increase in expense should be debit and decrease should be credit.
Revenue: Increase in revenue should be credit and decrease should be debit.

To Identify: Correct statement from given statements.

Answer:

Option b, debit to utility expense for $700 is the correct option.

Explanation of Solution

Option b.

Since, increase in expense reduces equity of a company, it should be debited.

Option a.

Since, increase in expense reduces equity of a company, it should be debited.

Option c.

Since, accounts payable is a short term liability and increase overall liability when it increases, it should be credited.

Option d.

Since, cash is an asset and decrease overall asset when it reduces, it should be credited.

Option e.

Since, there is no effect on the common stock in the given transaction, it should remain same.

Conclusion

Thus, the correct option is b.

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Answer 3

Textbook Question

Chapter 2, Problem 1MCQ

Amalia Company received its utility bill for the current period of $700 and immediately paid it. Its journal entry to record this transaction includes a

Credit to Utility Expense for $700.
Debit to Utility Expense for $700.
Debit to Accounts Payable for $700.
Debit to Cash for $700.
Credit to capital for $700.

Expert Solution & Answer

To determine

Journal Entry: It refers to the process of recording the data into books of accounts on continuous basis. It is a process of record keeping for every transaction by a company or a firm.

Rules of Journal Entry: The rules for journal entry are defined by five accounting components,

Assets: Increase in asset should be debit and decrease should be credit.
Liabilities: Increase in liabilities should be credit and decrease should be debit.
Equity: Increase in Equity should be credit and decrease should be debit.
Expense: Increase in expense should be debit and decrease should be credit.
Revenue: Increase in revenue should be credit and decrease should be debit.

To Identify: Correct statement from given statements.

Answer:

Option b, debit to utility expense for $700 is the correct option.

Explanation of Solution

Option b.

Since, increase in expense reduces equity of a company, it should be debited.

Option a.

Since, increase in expense reduces equity of a company, it should be debited.

Option c.

Since, accounts payable is a short term liability and increase overall liability when it increases, it should be credited.

Option d.

Since, cash is an asset and decrease overall asset when it reduces, it should be credited.

Option e.

Since, there is no effect on the common stock in the given transaction, it should remain same.

Conclusion

Thus, the correct option is b.

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Answer 4

Textbook Question

Chapter 2, Problem 1MCQ

Amalia Company received its utility bill for the current period of $700 and immediately paid it. Its journal entry to record this transaction includes a

Credit to Utility Expense for $700.
Debit to Utility Expense for $700.
Debit to Accounts Payable for $700.
Debit to Cash for $700.
Credit to capital for $700.

Expert Solution & Answer

To determine

Journal Entry: It refers to the process of recording the data into books of accounts on continuous basis. It is a process of record keeping for every transaction by a company or a firm.

Rules of Journal Entry: The rules for journal entry are defined by five accounting components,

Assets: Increase in asset should be debit and decrease should be credit.
Liabilities: Increase in liabilities should be credit and decrease should be debit.
Equity: Increase in Equity should be credit and decrease should be debit.
Expense: Increase in expense should be debit and decrease should be credit.
Revenue: Increase in revenue should be credit and decrease should be debit.

To Identify: Correct statement from given statements.

Answer:

Option b, debit to utility expense for $700 is the correct option.

Explanation of Solution

Option b.

Since, increase in expense reduces equity of a company, it should be debited.

Option a.

Since, increase in expense reduces equity of a company, it should be debited.

Option c.

Since, accounts payable is a short term liability and increase overall liability when it increases, it should be credited.

Option d.

Since, cash is an asset and decrease overall asset when it reduces, it should be credited.

Option e.

Since, there is no effect on the common stock in the given transaction, it should remain same.

Conclusion

Thus, the correct option is b.

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Answer 5

Textbook Question

Answer 6

Textbook Question

Answer 7

Expert Solution & Answer

To determine

Journal Entry: It refers to the process of recording the data into books of accounts on continuous basis. It is a process of record keeping for every transaction by a company or a firm.

Rules of Journal Entry: The rules for journal entry are defined by five accounting components,

Assets: Increase in asset should be debit and decrease should be credit.
Liabilities: Increase in liabilities should be credit and decrease should be debit.
Equity: Increase in Equity should be credit and decrease should be debit.
Expense: Increase in expense should be debit and decrease should be credit.
Revenue: Increase in revenue should be credit and decrease should be debit.

To Identify: Correct statement from given statements.

Answer:

Option b, debit to utility expense for $700 is the correct option.

Explanation of Solution

Option b.

Since, increase in expense reduces equity of a company, it should be debited.

Option a.

Since, increase in expense reduces equity of a company, it should be debited.

Option c.

Since, accounts payable is a short term liability and increase overall liability when it increases, it should be credited.

Option d.

Since, cash is an asset and decrease overall asset when it reduces, it should be credited.

Option e.

Since, there is no effect on the common stock in the given transaction, it should remain same.

Conclusion

Thus, the correct option is b.

Answer 8

Expert Solution & Answer

To determine

Journal Entry: It refers to the process of recording the data into books of accounts on continuous basis. It is a process of record keeping for every transaction by a company or a firm.

Rules of Journal Entry: The rules for journal entry are defined by five accounting components,

Assets: Increase in asset should be debit and decrease should be credit.
Liabilities: Increase in liabilities should be credit and decrease should be debit.
Equity: Increase in Equity should be credit and decrease should be debit.
Expense: Increase in expense should be debit and decrease should be credit.
Revenue: Increase in revenue should be credit and decrease should be debit.

To Identify: Correct statement from given statements.

Answer:

Option b, debit to utility expense for $700 is the correct option.

Explanation of Solution

Option b.

Since, increase in expense reduces equity of a company, it should be debited.

Option a.

Since, increase in expense reduces equity of a company, it should be debited.

Option c.

Since, accounts payable is a short term liability and increase overall liability when it increases, it should be credited.

Option d.

Since, cash is an asset and decrease overall asset when it reduces, it should be credited.

Option e.

Since, there is no effect on the common stock in the given transaction, it should remain same.

Conclusion

Thus, the correct option is b.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

To determine

Journal Entry: It refers to the process of recording the data into books of accounts on continuous basis. It is a process of record keeping for every transaction by a company or a firm.

Rules of Journal Entry: The rules for journal entry are defined by five accounting components,

Assets: Increase in asset should be debit and decrease should be credit.
Liabilities: Increase in liabilities should be credit and decrease should be debit.
Equity: Increase in Equity should be credit and decrease should be debit.
Expense: Increase in expense should be debit and decrease should be credit.
Revenue: Increase in revenue should be credit and decrease should be debit.

To Identify: Correct statement from given statements.

Answer:

Option b, debit to utility expense for $700 is the correct option.