Question

For each of the following independent events, identify the account that would be debited and the account that would be credited. The accounts for the first event are identified as an example.
(a) Received cash by issuing common stock
(b) Received cash for services to be performed in the future.
(c) Paid salaries payable.
(d) Provided services on account.
(e) Paid cash for operating expenses.

Answer 1

Answer:

A. Received cash by issuing common stock

Debit: Cash

Credit: common stock

B. Received cash for services to be performed in the future.

Debit: Cash

Credit: unearned revenue.

C. Paid salaries payable

Debit: salaries payable

Credit: cash

D. Provided services on account.

Debit: accounts receivable

Credit: service revenue

E. Paid cash for operating expenses

Debit: operating expenses

Credit: cash

Explanation:

A. Received cash by issuing common stock

Debit: Cash

Credit: common stock

B. Received cash for services to be performed in the future.

Debit: Cash

Credit: unearned revenue.

C. Paid salaries payable

Debit: salaries payable

Credit: cash

D. Provided services on account.

Debit: accounts receivable

Credit: service revenue

E. Paid cash for operating expenses

Debit: operating expenses

Credit: cash