Concept explainers
Increases are recorded on which side of asset, liability, and owner’s equity accounts?
Mention the side of the asset, liability and owner’s equity account in which the increases are recorded.
Explanation of Solution
Guidelines for debit and credit
For all increase in assets, expenses and losses and all decrease in liabilities, owners’ equities, it is debited.
For all increase in liabilities, owners’ equities and decrease in assets, expenses and losses, it is credited.
The side of the asset account in which increases are recorded is as shown below:
Assets | |
Debit (+) |
Credit (-) |
Increase (Normal balance) |
Decreases |
Table (1)
The side of the liability account in which increases are recorded is as shown below:
Liabilities | |
Debit (-) |
Credit (+) |
Decrease |
Increases (Normal balance) |
Table (2)
The side of the owner’s equity account in which increases are recorded is as shown below:
Owner’s Equity | |
Debit (-) |
Credit (+) |
Decrease |
Increases (Normal balance) |
Table (3)
Want to see more full solutions like this?
Chapter 3 Solutions
COLLEGE ACCOUNTING (LL)W/ACCESS>CUSTOM<
- The balance sheet lists which of the following? A. assets, liabilities, and owners equity B. revenues, expenses, gains, and losses C. assets, liabilities, and investments by owners D. revenues, expenses, gains, and distributions to ownersarrow_forwardExplain how the following items affect equity: revenue, expenses, investments by owners, and distributions to owners.arrow_forwardAn account that has unearned in its name is classified as what type of account? a. Asset b. Liability c. Revenue d. Owners equity e. Expensearrow_forward
- List the classification of each of the following accounts as A (asset), L (liability), OE (owners equity), R (revenue), or E (expense). Write Debit or Credit to indicate the increase side, the decrease side, and the normal balance side.arrow_forwardFINANCIAL STATEMENT ACCOUNTS Label each of the following accounts as an asset (A), liability (L), owners equity (OE), revenue (R), or expense (E). Indicate the financial statement on which the account belongsincome statement (IS), statement of owners equity (SOE), or balance sheet (BS)in a format similar to the following.arrow_forwardFINANCIAL STATEMENT ACCOUNTS Label each of the following accounts as an asset (A), liability (L), owners equity (OE), revenue (R), or expense (E). Indicate the financial statement on which the account belongsincome statement (IS), statement of owners equity (SOE), or balance sheet (BS)in a format similar to the following.arrow_forward
- Identify the correct components of the income statement. A. revenues, losses, expenses, and gains B. assets, liabilities, and owners equity C. revenues, expenses, investments by owners, distributions to owners D. assets, liabilities, and dividendsarrow_forwardAccounts Payable is an example of an asset account.arrow_forwardWhat do we mean when we say that capital, drawing, revenue, and expense accounts are under the umbrella of owners equity?arrow_forward
- Which of these accounts is an asset? A. Common Stock B. Supplies C. Accounts Payable D. Fees Earnedarrow_forwardDefine current assets and current liabilities. Why are current assets and current liabilities separated from noncurrent assets and long-term liabilities on the balance sheet?arrow_forwardDefine assets, liabilities, owners equity, revenues, and expenses.arrow_forward
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubCollege Accounting, Chapters 1-27AccountingISBN:9781337794756Author:HEINTZ, James A.Publisher:Cengage Learning,Principles of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College
- Cornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage LearningCollege Accounting (Book Only): A Career ApproachAccountingISBN:9781305084087Author:Cathy J. ScottPublisher:Cengage Learning