Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615



Accounting (Text Only)

26th Edition
Carl Warren + 2 others
ISBN: 9781285743615
Textbook Problem

If the effect of the debit portion of an adjusting entry is to increase the balance of an asset account, which of the following statements describes the effect of the credit portion of the entry?

  1. a. Increases the balance of a revenue account.
  2. b. Increases the balance of an expense account.
  3. c. Increases the balance of a liability account.

To determine

Adjusting entries:

Adjusting entries refers to the entries that are made at the end of an accounting period in accordance with revenue recognition principle, and expenses recognition principle.  All adjusting entries affect at least one income statement account (revenue or expense), and one balance sheet account (asset or liability).

To identify: The effect of the debit and credit portion of adjusting entry.


In this case, the business delivered goods/performed service to the customer but cash is not yet received. Hence, the debit portion of an asset account, and the credit portion of revenue account should affected.

Date Description







XXX Accounts receivable   XXXX  
          Fees earned     XXXX
  (To record the revenue generated at the end of the accounting year)      

Table (1)

  • Accounts receivable is an asset, and it increases the value of asset, hence debit the accounts receivable...

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