Question

Issued check 290 to Hospital Texaco for gas purchased for delivery trucks in the amount $389.95. What specialized journals would this be posted in and how would you post it? What accounts would be debited and what accounts would be credited?

Answer 1

The issued check to Hospital Texaco for gas would be recorded in the cash disbursements journal, debiting the Delivery Expense account and crediting the Cash account.

Step-by-step explanation:

When a check is issued to Hospital Texaco for gas purchased for delivery trucks in the amount of $389.95, the transaction would be recorded in the cash disbursements journal. The cash disbursements journal is used to record all cash payments made by a business, which include expenses, asset purchases, debt payments, or withdrawals. For this particular transaction, the appropriate accounts to debit and credit would be:

• Debit the Delivery Expense account (or a more specific account for vehicle fuel if one exists), representing an increase in expenses.
• Credit the Cash account, representing a decrease in the cash balance due to the check being issued.

The entry made in the cash disbursements journal would then be posted to the general ledger, updating the respective ledger accounts. This ensures that the financial statements reflect the transaction accurately.