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.

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Answer 1

Question

Chapter 2, Problem 1MCQ

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.

Expert Solution & Answer

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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Students have asked these similar questions

General accounting question

StriveTech Co. uses the high-low method to analyze cost behavior. The company observed that at 18,000 machine hours of activity, total maintenance costs averaged $28.00 per hour. When activity increased to 22,000 machine hours (still within the relevant range), the average total cost per machine hour dropped to $25.00. Based on this information, the fixed cost was: a. $396,000 b. $297,000 c. $308,000 d. $220,000 e. $528,000

Bright Tech Inc. sold one of its divisions at a loss of $80,000. The company's income tax rate is 30%. What is the after-tax loss that will be reported on the income statement?

Answer 2

Question

Chapter 2, Problem 1MCQ

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.

Expert Solution & Answer

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

Question

Chapter 2, Problem 1MCQ

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.

Expert Solution & Answer

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

Question

Chapter 2, Problem 1MCQ

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.

Expert Solution & Answer

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

Chapter 2, Problem 1MCQ

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.

Expert Solution & Answer

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 6

Chapter 2, Problem 1MCQ

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.

Expert Solution & Answer

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 7

Chapter 2, Problem 1MCQ

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.

Answer 8

Expert Solution & Answer

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.

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Conclusion

Thus, the correct option is b.

Answer 12

Ch. 2 - Prob. 1MCQ Ch. 2 - Prob. 2MCQ Ch. 2 - Prob. 3MCQ Ch. 2 - Prob. 4MCQ Ch. 2 - Bonaventure Company has total assets of...Ch. 2 - Provide the names of two (a) asset accounts, (b)...Ch. 2 - Prob. 2DQ Ch. 2 - Prob. 3DQ Ch. 2 - Prob. 4DQ Ch. 2 - Prob. 5DQ

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