Double Entry Accounting

The following excercise should aid in understanding Double Entry Accounting. Please answer the questions below and proceed by clicking the Check My Answers button located at the bottom of the page.

1.	Your company buys a new forklift for $500 cash. The entry for this transaction should be:
			A debit of $500 to cash and a credit of $500 to sales
			A debit of $500 to cash and a $500 credit to equipment
			A credit of $500 to cash and a debit of $500 to equipment
			None of the above
2.	You borrow $750,000 on a 90-day note. The money is deposited into checking. The entry for this transaction should be:
			A debit of $750,000 to cash and a credit of $750,000 to notes payable
			A credit of $750,000 to cash and a debit of $750,000 to notes payable
			A debit of $750,000 to cash and a debit of $750,000 to interest expense
			None of the above
3.	A customer buys a product from you for $350 and promises to pay you in 30 days. The customer already has an open account with your firm. The entry for this transaction is:
			A credit of $350 to sales and a debit of $350 to cash
			A credit of $350 to sales and a debit of $350 to accounts payable
			A debit of $350 to sales and a credit of $350 to accounts receivable
			None of the above
4.	Your company buys some materials to use in producing a product that it sells. The cost of the materials is $350. The company agrees to pay the vendor in 30 days. The entry for this transaction is:
			A debit of $350 to materials expense and a credit of $350 to accounts payable
			A credit of $350 to materials expense and a debit of $350 to accounts payable
			A debit of $350 to materials expense and a credit of $350 to accounts receivable
			A credit of $350 to materials expense and a debit of $350 to accounts receivable
			None of the above