BASIC-ACCOUNTING-MIDTERM-EXAM-2nd-SEM-A.Y.-2016-17-SAM (1)

Iii rules of debit and credit 15 points the account

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III. Rules of Debit and Credit (15 points) The account type determines how increases or decreases in it are recorded. Determine whether the word debit and credit is appropriate for each statement. 1. Asset accounts normally have ______________balances. An increase in asset is recorded a __________while a decrease in assets is recorded as a_____________. 2. Liability accounts normally have _______ balances. An increase in liability is recorded by a __________ and a decrease is entered as a _____________.
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3. The owner’s capital account normally has a __________ balance. These account increase on the ___________side and decrease on the ______side. 4. Income accounts normally have _________balances. These accounts increase on the __________side and decrease on the ________side. 5. Expense accounts normally have _________balances. These accounts increase on the ________ side and decrease on the _________ side. IV. Journal Entries. (45 points) Leonila Generales won a concession to rent out bicycle in the Quezon Circle during the summer. During the month of April, Generales completed the following transaction for her bicycle rental business: Apr. 2 Began business by placing P120, 000 in a business checking account. 3 Purchased supplies on account for P1, 500. 4 Purchased ten bicycles for P 25, 000, paying P12, 000 down and agreed to pay the balance in thirty days. 5 Paid P 29, 000 in cash for a furnished container to store the bicycles and use for other operations.
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