Chapter 5 Exercises

Cash, Modified Cash, and Accrual Bases of Accounting Select the debit and credit account for each entry for the following transactions, using the (a) cash basis, (b) modified cash basis, and (c) accrual basis of accounting. If no entry is required, select "No entry" from the drop down box. Cash Basis Modified Cash Basis Accrual Basis 1. Purchase supplies on account. Debit Accounts Payable Credit Accounts Payable Accounts Receivable 2. Make payment on asset previously purchased. Debit Cash Credit No entry Supplies Expense 3. Purchase supplies for cash. Debit Credit 4. Purchase insurance for cash. Debit Credit Debit 5. Pay cash for wages. Credit Debit 6. Pay cash for phone expense. Credit Debit 7. Pay cash for new equipment. Credit