Chapter 2 · Practice

T-Accounts and Double Entry

Four short exercises on what you just read. Each answer is checked right away and comes with an explanation. Your progress stays in this browser.

Debit and credit rules (open if you need a reminder)

Account type	Increase	Decrease	Normal balance
Asset	Debit	Credit	Debit
Liability	Credit	Debit	Credit
Equity	Credit	Debit	Credit
Revenue	Credit	Debit	Credit
Expense	Debit	Credit	Debit

Assets and expenses grow on the left (debit). Liabilities, equity and revenue grow on the right (credit). Dividends reduce equity, so they are recorded as a debit.

Exercise 1 of 4

Classify the accounts

For each account, pick its type and its normal balance. The answer is checked as soon as both are chosen.

Exercise 2 of 4

Record the journal entries

Mary and Jack run a small consulting firm. For each transaction, choose the account to debit, the account to credit, and the amount.

Exercise 3 of 4

Post to the Cash T-account

Decide whether each movement goes on the debit or the credit side of Cash. Then enter the balance and the side it sits on.

Cash

Balance

Exercise 4 of 4

Prepare the reports

These are the firm's account balances on May 31, 2019. Fill in the income statement and the balance sheet, then check that the equation holds.

Cash 13,660 Dr Equipment 1,320 Dr Loans 7,000 Cr Common Stock 6,000 Cr Service Revenue 4,500 Cr Expenses 2,320 Dr Dividends Paid 200 Dr

Income Statement

Revenue

Expenses

Net income

Balance Sheet

Total assets

Total liabilities

Total equity

Practice for Chapter 2 of U.S. Accounting Fundamentals.