For this question, review the journal entry and explain what the probable transaction would be requiring the entry, and how this entry is impacting the financial statements. Explaining that account x is a debit/credit etc is not an acceptable answer. Explanation should cover the actual transaction that occurred.

Example Question: Utilities Expense 700 Cash 700

An acceptable answer would be: Client paid current months utility bill, asset is decreasing, and net worth is decreasing.

Question:

Cash

100,000 debit

Office Equipment

24,000 debit

Common Stock

124,000 credit