If Taylor Willow, the Owner of Willow Hardware Proprietorship, Uses

question 14

Multiple Choice

If Taylor Willow, the owner of Willow Hardware proprietorship, uses cash of the business to purchase a family automobile, the business should record this use of cash with an entry to:

• A) Debit Cash and credit T. Willow, Withdrawals.
• B) Debit T. Willow, Withdrawals and credit Cash.
• C) Debit Automobiles and credit Cash.
• D) Debit Cash and credit Salary Expense.
• E) Debit Salary Expense and credit Cash.

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Definitions:

Trial Balance

A bookkeeping worksheet in which the balances of all ledgers are compiled into debit and credit account columns to verify that the ledger accounts are correctly balanced.

Ledger Balances

The current totals in ledger accounts, reflecting all transactions up to a given point in time.

Trial Balance

An accounting report that lists the balances of all ledgers accounts to verify that total debits equal total credits.

Ledger

A comprehensive collection of a company’s financial accounts, recording all transactions and financial activities.