CPB / BookKeeping Double Entry Bookkeeping 3

Question 1

An owner withdraws $1,000 cash for personal use. How is this recorded?

Accepted Answer

Debit Drawing $1,000, Credit Cash $1,000

Answer

Owner withdrawals are recorded as a debit to the Drawing (or Withdrawal) account and a credit to Cash.

Question 2

Which of the following is a contra account that normally carries a credit balance?

Accepted Answer

Accumulated Depreciation

Answer

Accumulated Depreciation is a contra asset account that carries a credit balance, offsetting the related asset's debit balance.

Question 3

A $400 utility bill is received but not yet paid. The adjusting entry is:

Accepted Answer

Debit Utilities Expense, Credit Utilities Payable

Answer

An accrued expense is recorded by debiting the expense and crediting the corresponding payable liability.

Question 4

Which double entry is made when a business sells goods on credit for $750?

Accepted Answer

Debit Accounts Receivable $750, Credit Sales Revenue $750

Answer

A credit sale increases Accounts Receivable (debit) and increases Sales Revenue (credit).

Question 5

Depreciation expense of $600 is recorded for the year. The credit is made to:

Accepted Answer

Accumulated Depreciation

Answer

Depreciation is recorded by debiting Depreciation Expense and crediting Accumulated Depreciation, not the asset account itself.

CPB / BookKeeping Practice Test