Double-Entry System Basics | Answers

Say whether each item increases with a debit or a credit

For each transaction, write which account is debited and which is credited.

Bought furniture for $1,000 cash
Debit: Furniture
Credit: Cash

Received $300 from a customer
Debit: Cash
Credit: Sales | Service Revenue

Paid $150 electricity bill
Debit: Electricity Expense
Credit: Cash

Took a bank loan of $4,000
Debit: Cash
Credit: Loan Payable

Owner withdrew $200 for personal use
Debit: Drawings
Credit: Cash

Fill in the correct sides

Transaction
You pay $100 for office supplies in cash.

A new bakery started business. Here are three transactions from Day 1

The owner invested $10,000 cash.
➛ Debit Cash
➛ Credit Capital

➛ The bakery bought an oven for $3,000 cash.
➛ Debit Equipment
➛ Credit Cash

➛ The bakery made its first sale and received $150 cash.
➛ Debit Cash
➛ Credit Sales Revenue

Which accounts increased?
➛ Cash
➛ Capital
➛ Equipment
➛ Sales Revenue

Which accounts decreased?
➛ Cash | when buying the oven

What side is debit on?
➛ Left

What side is credit on?
➛ Right

Debits increase which two major account types?
➛ Assets and Expenses

Credits increase which two major account types?
➛ Liabilities and Equity | and Revenue

Every transaction must have at least one debit and one credit.
➛ True

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