Which of the following is NOT a possible journal entry according to the rules of debits and credits?

• A. Debit Equipment \$2,000; Debit Supplies \$500; Credit Cash \$2,500
• B. Debit Cash \$1,000; Credit Revenue \$1,000
• C. Debit Accounts Payable \$500; Credit Inventory \$500
• D. Debit Service Revenue \$800; Credit Service Revenue \$800

Answer: (D)

Verified step by step guidance

1. Step 1: Understand the rules of debits and credits. Debits increase asset and expense accounts, while credits increase liability, equity, and revenue accounts. Debits and credits must always balance in a journal entry.
2. Step 2: Analyze the first journal entry: Debit Equipment \$2,000; Debit Supplies \$500; Credit Cash \$2,500. This entry is valid because the total debits (\$2,000 + \$500 = \$2,500) equal the total credits (\$2,500).
3. Step 3: Analyze the second journal entry: Debit Cash \$1,000; Credit Revenue \$1,000. This entry is valid because the debit to Cash (an asset account) and the credit to Revenue (a revenue account) are equal, maintaining balance.
4. Step 4: Analyze the third journal entry: Debit Accounts Payable \$500; Credit Inventory \$500. This entry is valid because it decreases a liability account (Accounts Payable) and decreases an asset account (Inventory) by the same amount, maintaining balance.
5. Step 5: Analyze the fourth journal entry: Debit Service Revenue \$800; Credit Service Revenue \$800. This entry is NOT valid because Service Revenue is a revenue account, and it cannot be both debited and credited in the same transaction. This violates the rules of debits and credits.