Multiple choice

1. Performing a service for $500 cash and $700 on account would include a:

 a. debit to cash for $1,200

 b. debit to service revenue for $1,200

 c. credit to service revenue for $500

 d. debit to accounts receivable for $700 

2. The normal balance of cash is a _____ because it is a(n) _____ account.

 a. debit, expense

 b. credit, asset

 c. debit, asset

 d. credit, revenue 

3. The normal balance of accounts payable is a _____ because it is a(n) _____ account.

 a. credit, liability

 b. credit, revenue

 c. credit, owner's equity

 d. credit, asset  

4. An owner investment of a building, valued at $200,000, with a $55,000 outstanding mortgage into an entity would:

 a. increase owner's equity $145,000

 b. increase total assets $55,000

 c. decrease liabilities $145,000

 d. increase owner's equity $200,000