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9. National Corp. purchases $1,000 of supplies on credit. As a result its

a. current assets will increase by $1,000
b. current assets will decrease by $1,000
c. current assets will remain the same
d. total assets will decrease by $1,000

10. A journal does all of the following except
a. summarizes all of the transactions that effect one account in a “T-account”
b. records all the assets of a company
c. records each day’s transactions
d. records all the revenues and expenses of a company

A ledger summarizes all of the transactions that affect one account in a “T-account.” A journal is a record of each day’s transactions. It records any type of transaction regardless if it affects revenues, expenses, assets, cash receipts or cash disbursements

11. Which of the following requires a debit?
a. decrease in assets
b. decrease in liabilities
c. increase in liabilities
d. increase in stockholders’ equity

Assets are increased by debits and decreased by credits. Liabilities are increased by credits and decreased by debits. Stockholders’ equity is increased by credits and decreased by debits

12. Which of the following requires a credit?
a. decreases in liabilities
b. decreases in stockholders’ equity
c. increases to assets
d. increases to liabilities

13. ABC Co. received $20,000 from investors and in return issued $20,000 of stock. As a result of this transaction, what journal entry is required?
a. debit cash $20,000 and credit contributed capital $20,000
b. debit cash $20,000 and debit contributed capital $20,000
c. credit cash 20,000 and credit contributed capital $20,000
d. credit cash $20,000 and debit contributed capital $20,000
14. National Corporation purchased $10,000 of furnishings and equipment for cash. As a result of this transaction, what journal entry is required?
a. debit cash $10,000 and credit furnishings and equipment $10,000
b. debit furnishings and equipment $10,000 and credit cash $10,000
c. debit furnishings and equipment $10,000 and debit cash $10,000
d. credit furnishings and equipment $10,000 and credit cash $10,000
15. XMO, Inc. borrowed $25,000 from a bank, signing a formal agreement to repay the loan plus interest in five years. XMO placed the borrowed money in its checking account. What is the impact of this transaction?
a. current assets are increased and current liabilities are increased
b. noncurrent assets are increased and current liabilities are increased
c. current assets are increased and noncurrent liabilities are increased
d. noncurrent assets are increased and noncurrent liabilities are increased
16. The Hawk Co. borrowed $30,000 from a bank, depositing those funds in its bank account and signing a formal agreement to repay the loan in two years. What is the correct journal entry for this transaction?
a. debit notes payable and credit cash for $30,000
b. debit notes payable and debit cash for $30,000
c. credit notes payable and credit cash for $30,000
d. debit cash and credit notes payable for $30,000
17. The Enterprise Co. paid $4,000 cash to purchase furnishings and equipment. What is the impact of this transaction?
a. total assets are decreased
b. current assets are decreased
c. current assets stay the same
d. total assets are increased