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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

Which of the following statements is correct?

  1. a. Increases to cash are shown on the right side of the account.
  2. b. Decreases to accounts payable are shown on the right side of the account.
  3. c. Decreases to supplies are shown on the right side of the account.
  4. d. Increases to rent expense are shown on the right side of the account.

To determine

Identify the correct statement.

Explanation

Trial Balance:

Trial balance is the summary of accounts, and their debit and credit balances at a given time.  It is usually prepared at end of the accounting period.  Debit balances are listed in left   column and credit balances are listed in right column.  The totals of debit and credit column should be equal.  Trial balance is useful in the preparation of the financial statements.

Justification for the incorrect option a:

Increase to cash is shown on the left side (debit) of the account. Therefore, it is an incorrect option.

Justification for the incorrect option b:

Decreases to accounts payable are shown on the left side (debit) of the account...

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