Identify the Accounts to Be Debited and Credited for Each

question 136

Essay

Identify the accounts to be debited and credited for each of the following transactions.
1. The owners invested $10,000 cash in the business in exchange for ordinary shares.
2. Purchased supplies on account for $1,000.
3. Billed customers $2,000 for services performed.
4. Paid salaries of $900.

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Definitions:

Profit

The financial gain obtained when the revenue generated from business activities exceeds the expenses, costs, and taxes needed to sustain the operations.

Markdown

A reduction from the original or retail price of goods or services, typically to stimulate sales or clear out inventory.

Invoice

A paper provided by the vendor to the purchaser detailing the goods or services rendered and the total charge.

Discount

A reduction applied to a regular price or rate, often used to encourage purchase or prompt payment.