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If you have difficulty answering the following questions, learn more about this topic by reading our Debits and Credits (Explanation) and Additional Explanation.
Use the following information for questions 1 and 2:
A company receives $500 of cash as an additional investment in the company by its owner, Mary Smith. The company’s Cash account is increased and Mary Smith, Capital is increased.
Yes
No
Yes
No
Use the following information for questions 3 through 6:
A company using the accrual method of accounting performed services on account in August. The services were for $2,000 and the company gave the customer credit terms that state the amount is to be paid to the company in September.
Cash
Accounts Receivable
Service Revenue
Cash
Accounts Receivable
Service Revenue
Cash
Accounts Receivable
Service Revenue
Cash
Accounts Receivable
Service Revenue
Debited
Credited
Debited
Credited
Debit
Credit
Debit
Credit
Debit
Credit
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