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Chapter 2 Analyzing Transactions 77

4.

Cash

Accounts Receivable

Supplies

Prepaid Insurance

Equipment

Accounts Payable

J. F. Outz, Capital

J. F. Outz, Drawing

Professional Fees

Salary Expense

Rent Expense

Laboratory Expense

Utilities Expense

Miscellaneous Expense

2,361

8,720

535

835

21,520

1,250

1,725

800

545

360

132

38,783

1,335

30,583

6,865

38,783

J. F. Outz, M.D.Unadjusted Trial Balance

April 30, 2009

DebitBalances

CreditBalances

Self-Examination Questions (Answers at End of Chapter)

1. A debit may signify a(n):A. increase in an asset account.B. decrease in an asset account.C. increase in a liability account.D. increase in the owner’s capital account.

2. The type of account with a normal credit bal-ance is:A. an asset. C. a revenue.B. drawing. D. an expense.

3. A debit balance in which of the following

accounts would indicate a likely error?A. Accounts ReceivableB. CashC. Fees EarnedD. Miscellaneous Expense

4. The receipt of cash from customers in paymentof their accounts would be recorded by:A. a debit to Cash and a credit to Accounts

Receivable.B. a debit to Accounts Receivable and a credit

to Cash.C. a debit to Cash and a credit to Accounts

Payable.D. a debit to Accounts Payable and a credit to

Cash.

5. The form listing the titles and balances of the ac-counts in the ledger on a given date is the:A. income statement.B. balance sheet.C. statement of owner’s equity.D. trial balance.

1. What is the difference between an account and a ledger?2. Do the terms debit and credit signify increase or decrease or can they signify either?

Explain.

Eye Openers