Name the Accounts Exercise
(Plus Journals)
Before you begin: For purposes of exams and testing it's important to make sure you not only answer accounting questions correctly but can complete them at the correct speed. So please time yourself for this exercise.
Difficulty Rating:
Beginner
Time limit:
5 minutes
Question:
Which accounts are affected in each of the following transactions?
1. Invested cash in the business - $4,000
2. Bought equipment for cash - $500
3. Bought equipment on account - $800
4. Paid cash on account for equipment purchased in transaction - $300
5. Withdrew cash for personal use - $700
Solution:
Account Names:
1. Bank/Cash (increases by $4,000) and Capital (owner's equity increases by $4,000)2. Equipment (increases by $500) and Bank/Cash (decreases by $500)
3. Equipment (increases by $800) and Accounts Payable (increases by $800)
4. Bank/Cash (decreases by $300) and Accounts Payable (decreases by $300)
5. Drawings (owner's equity decreases by $700) and Bank/Cash (decreases by $700)
Journal Entries:
Note that journal entries were not asked for in this question but it would be good practice if you attempted this too.1. Dr Bank...............$4,000
Cr Capital............................$4,000
2. Dr Equipment...............$500
Cr Bank........................................$500
3. Dr Equipment.........................$800
Cr Accounts Payable............................$800
4. Dr Accounts Payable...............$300
Cr Bank..................................................$300
5. Dr Drawings...............$700
Cr Bank...................................$700
Hope you enjoyed our Name the Accounts Exercise!
Let us know what you thought by leaving a comment below!
Best,
Michael Celender
Accounting Basics for Students
Related Questions & Tutorials:
- Double Entry Exercise: Which Accounts Are Affected?
- Basic Journal Entries Question: Capital + Fixed Asset Purchase
Click here for more Basic Accounting Questions
Return to the chapter on the Ten Common Basic Accounting Transactions
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