Concept explainers
(1)
Asset:
Assets refer to the resources owned by the business, which are utilized in the course of the business to generate revenue.
Liability:
Liabilities include the claims of the creditors on the assets of the business. The liability is the obligation of the business.
Stockholder’s equity:
Stockholder’s equity refers to the right the owner possesses over the resources of the business. Revenues and the expenses are the components of the owner’s equity.
Revenues:
Revenue refers to the income received from the business activity or sale of the output, during the accounting period.
Expenses:
Expenses refer to the cost incurred on the necessary purchases of the fixed assets by the firm, or the production of the goods and services, during the accounting period.
To Indicate: The type of account for each of the given accounts.
(2)
Normal balance:
Normal balance refers to the excess of amount on one side, over the amount on the other side in an account. The excess amount of debit side over the credit side is shown as the normal debit balance. The excess amount of credit side over the debit side is shown as the normal credit balance.
Type of account | Normal balance |
Asset account | Debit balance |
Liability account | Credit balance |
Expense account | Debit balance |
Revenue account | Credit balance |
Credit balance | |
Dividend account | Debit balance |
Table (2)
To Indicate: The type of account for each of the given accounts.
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FINANCIAL ACCOUNTING W/ACCESS >CI<
- For the following accounts please indicate whether the normal balance is a debit or a credit. A. Sales B. Dividends C. Office Supplies D. Retained Earnings E. Accounts Receivable F. Prepaid Rent G. Prepaid Insurance H. Wages Payable I. Building J. Wages Expensearrow_forwardFor the following accounts indicate whether the normal balance is a debit or a credit. A. Unearned Revenue B. Interest Expense C. Rent Expense D. Rent Revenue E. Accounts Payable F. Cash G. Supplies H. Accounts Payable I. Equipment J. Utilities Expensearrow_forwardLO3 To debit an account is to enter an amount on the left side of the account.arrow_forward
- Determine whether the balance in each of the following accounts increases with a debit or a credit. A. Cash B. Common Stock C. Equipment D. Accounts Payable E. Fees Earned F. Electricity Expensearrow_forwardWhich of the following pairs of accounts are impacted the same with debits and credits? A. Cash and Unearned Service Revenue B. Electricity Expense and Office Supplies C. Accounts Receivable and Accounts Payable D. Buildings and Common Stockarrow_forwardIndicate whether each account that follows has a normal debit or credit balance. A. Unearned Revenue B. Office Machines C. Prepaid Rent D. Cash E. Legal Fees Earned F. Salaries Payable G. Dividends H. Accounts Receivable I. Advertising Expense J. Retained Earningarrow_forward
- NORMAL BALANCE OF ACCOUNT Indicate the normal balance (debit or credit) for each of the following accounts: 1. Cash 2. Rent Expense 3. Notes Payable 4. Owners Drawing 5. Accounts Receivable 6. Owners Capital 7. Toolsarrow_forwardThe words debit and credit are used in two ways in accounting: to debit an account and a debit balance. Explain both usages of the terms debit and credit.arrow_forwardWhich set of accounts has the same type of normal balance? A. Cash, accounts payable B. Prepaid rent, unearned service revenue C. Dividends, common stock D. Accounts payable, retained earningsarrow_forward
- State whether the balance in each of the following accounts increases with a debit or a credit. A. Office Supplies B. Retained Earnings C. Salaries Expense D. Accounts Receivable E. Service Revenuearrow_forwardDetermine the balance of the following T account: 94,100 debit 54,900 debit 133,300 credit 54,900 credit 133,300 debitarrow_forwardIdentify whether the following transactions would be recorded with a debit (Dr) or credit (Cr) entry. Indicate the normal balance of the account. Table 3.20arrow_forward
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