B. A. d. Accounts Receivable. Revenue: 11,000 Furniture (A) c. a debit to Cash of $1,400. A credit is used to record an increase in all of the following accounts except: A. - Increasing the. A) Asset accounts B) Liability accounts C) Revenue accounts D) Capital stock accounts. Apr. How much advertising expense should Pink Peonies Law Firm record for the two months ending February 28 under the b. the amount of revenue Seacoast Magazine should record for seven issues. a. d. Cash. 1) Which of the following accounts decreases with a credit? Dr. Cr. Each alternative has an Assets, liabilities b. Which of the following represents the correct flow of accounting data? Which of the following entries would be recorded if the company uses accrual basis accounting. All rights reserved. Is the Accounts Receivable account an asset, liability, equity, revenue, or expense account? C) capital. On that date, cash was debited and bank loan payable credited for $200,000. d. accounts payable. Service revenue. Capital and Investments C. Rent income and Loan D. Equipment and Creditor's. 7. T-accounts may be used to visually represent debit and credit entries. EndofYearReceiptsDisbursements0$0$1,0001$600$3002$600$3003$700$3004$700$3005$700$300. a. debit Cash; credit Accounts Payable b. debit Accounts Receivable; credit Cash c. debit Cash; credit Supplies Expense d. debit Accounts Payable; credit Cash, Which one of the following is a source of cash? Accounts Payable 5. a. Unearned Revenue b. Which of the following is considered a fiscal period? Accounts Payable: B c. Entry to record the consumed portion of an expense paid in advance, Which of the following is not a correct rule of debits and credits? Depreciation Expense b. D. an increase in accumul, Which pair of the listed accounts follows the rules of debits and credits, in relation to increases and decreases, in the same manner? Land b. c) asset account. b. Sales Revenue. a) Common stock b) Account payable c) Accounts receivable d) Retained earnings e) Unearned service revenue, Which of the following accounts is considered a contra account? On March 1, 2023, the U.S. Department of Justice (the "DOJ") unsealed criminal insider trading charges, and the SEC filed a parallel civil complaint, against the Executive Chairman of a publicly-traded healthcare company based on stock sales made pursuant to Rule 10b5-1 trading plans. Supplies c. Sales Revenue d. Dividends, Which of the following increases cash? Accounts Payable. a credit to Accounts Receivable of $1,400. c. Increases in both revenues and expenses are recorded with credits. c. interest revenue. Increase an expense; increase a liability. a. A. This cookie is set by GDPR Cookie Consent plugin. Understand these critical pieces of notation by exploring the definitions and purposes of debits and credits and how they help form the basics of double-entry accounting. c) Sales Discounts. Which of the following accounts is increased with a debit? Salaries and Wages Expense and Notes Payable b. Accounts Payable B. Service Revenue: I Which of the following sequences states the order in which accounts are listed on a trial balance? Cash in the bank is going to go down and candy will arrive at the store. D) Increase in assets, increase in stockholders equity. Accounts Payable: $10,000 Accounts Receivable: -, B A decrease in an asset account b. Investment income. c. Sales Returns and Allowances. Which of the following is correct about credit period. An Account that would be decreased by a credit is: A) Cash. d. Drawing Account, Fees Earn, Which of the following accounts increase by means of a debit entry in the ledger? The time period concept assumes that the activities of a business can be sliced into small time segments and that financial statements can be prepared for specific periods of time. d. Accounts Payable. It is added to the Bonds Payable balance and shown with stockholders' equity on the balance sheet. a. cash and notes payable b. salaries expense and retained earnings c. sales revenue and accounts receivable d. common stock (capital stock) and accounts payable. Confused? B) Increase in assets, increase in liabilities. D. Dividends. EndofYear012345Receipts$0$600$600$700$700$700Disbursements$1,000$300$300$300$300$300\begin{array}{|l|c|c|c|c|c|c|} Increases and decreases of the same account type are common with assets. Which of the following accounts decreases with a credit? d. Divi. How much service revenue would Protection Home have for the year under the Cash c. Interest Revenue d. Accounts Payable e. Cost of Goods Sold f. Prepaid Rent Expense g. Inventory h. Paid in Capital. These ending balances by account type can be referred to as the natural balance. C) capital. A) Expenses increase equity, so an expense account's normal balance is a debit balance. Which of the following would not be included on a balance sheet? b. sales. d. Land; Accounts Pay. Unearned Revenue (CR) Which of following transactions represents an external transaction? Cash and Accounts Receivable c. Treasury Stock and Common Stock d. Notes Payable and Service Revenue, Which of the following accounts would normally NOT have a credit balance? Accounts Receivable c. Inventory d. Accounts Payable, Which one of the following accounts will be CREDITED when making closing entries? The cookie is used to store the user consent for the cookies in the category "Other. Revenue These differences arise because debits and credits have different impacts across several broad types of accounts, which are: Asset accounts. Share premium has a credit balance, and a credit balance increases with a credit entry. a. Which of the following is true of the Discount on Bonds Payable account? a. Unearned Revenue b. To process a cash basis refund the caf would decrease sales revenue with a debit and decrease cash with a credit when they refund the customer. c. Cash is debited for $20 and A, On December 31, Collins Co. had the following list of accounts. Polisher 2 requires an initial investment of $10,000 and provides annual benefits of$1,770. Cash for example, increases with a debit. a. Inventory. a. wages payable b. notes payable c. unearned revenue d. accounts receivable. Cash c. Interest Revenue d. Accounts Payable e. Cost of Goods Sold f. Prepaid Rent Expense g. Inventory h. Paid in Capital. A. The ending balance in liability accounts will therefore be credits so that the equation will balance. A) Prepaid rent is used up through the passage of time. C) A trial balance has the same format as a balance sheet. a. capital, revenues, expenses Ob. Decrease Accounts Receivable with a credit and the normal balance is a credit. Retained earnings is not the same as cash, because it is based on net income or loss, not cash received. They decrease stockholders' equity thus they are increased with a debit. 1: Paid six months of rent, $4,800. Notes Payable B. a. Which of the following accounts is increased by a credit entry? Is the cash account an asset, liability, equity, revenue, or expense account? b) Allowance for Doubtful Accounts. Late payments can have a negative impact on your credit score. a. Seacoast Magazine should record revenue when it mails magazines to the subscribers. Createyouraccount, Answer: c. Accounts Payable; Unearned Revenue; Collins, Capital. Cash b. A credit to an account balance always results in the balance decreasing. Would a debit or a credit increase its account balance? D) Supplies purchased last month are used up. Debt ratio = Total liabilities / Total assets. C. added to bonds payable. b. Seacoast Magazine should record $14 for seven issues. Cash; Accounts Receivable; Collins, Capital c. Accounts Paya, Indicate whether a debit or credit decreases the normal balance of each of the following accounts. If a credit memorandum is issued, what account will be decreased on the seller's books? Revenue increases are recorded with a credit and decreases are recorded with a debit. A) Assets B) Liabilities C) Revenues D) Expenses. An entry made to the right side of an account is always a (n): credit. Bellow, assets and expense accounts are presented first to aid beginners with memorization. Accounts Receivable c. Allowance for Doubtful Accounts d. Bad Debt Expense (Ret. b. Also, what do they offset; as in if you debit or credit them what accounts are affected? What is the normal balance? d. Accounts Payable; Retained earnings; Revenues. a) Interest Payable b) Retained Earnings c) Prepaid expenses d) Accounts Receivable e) Gross Profit, Which of the following would be considered a "use" of cash for purposes of constructing a statement of cash flows? The $500 internet expense is recorded in May with a debit and a $500 AP is recorded with a credit. A record of the increases and decreases in a specific asset, liability, equity, revenue, or expense is a(n): a) Journal b) Trial balance c) Posting d) Account. Understand what accounting is, identify the areas or branches of accounting, and examine the types of accountants. b. is decreased by credits. a. Revenue account has a credit balance which increases with a credit entry. Land, Notes Receivable, and Prepaid Insurance c. Sales Revenue, Cash, and Equipment d. Rent Expense, Retained Earnings, an, Which of the following are sources of cash? Notes Payable (L) Protection Home's remaining customers owe the business $1,300. Sales revenues b. Cash, Fees Earned, Unearned Revenues. The estimated receipts and disbursements associated with the a. debits; debits b. credits; credits c. debits; credits d. credits; debits, Which of the following accounts increase by means of a debit entry in the ledger? Debit entries are used to: a. increase asset accounts b. decrease expense accounts c. increase liability accounts d. increase revenue accounts, Which of the following accounts has a normal debit balance? D) It is increased with debit entries. Equity increases are recorded with a credit and decreases with a debit. Which of the following accounts increase with credits? Question options: When a company performs a service but has not yet received payment, it . Depreciation Expense b. Take the example of a cash purchase for a client lunch. d. is increased by credits. Interest Payable (CR). b. Service Revenue c. Interest Payable d. Common Stock 10. Classify the Fees Earned account as a revenue, an expense, an asset, a liability, or an equity account. Wages Expense b. On January 1, the law firm paid $3,000 for 10 months of advertising. This account is a(n): a) expense account. Identify the financial statement (or statements) that each account would appear on. Increases and Decreases Accounts payable b. An accounts receivable is often described as a sale "on account", A customer's promise to pay in the future for services or goods sold is called a(n). B. an increase in prepaid expenses. Memorize rule: debit equity down, credit equity up. Which of the, Which of the following groups of accounts are increased with credits? c. Decrease in Accounts Payable. a. Cash: C, B Which of the following accounts has a normal debit balance? By definition, the rules of debits and credits mirror the accounting equation: Assets = Liabilities + Equity. Typically bills for items such as internet expense will be first recorded into accounts payable, a liability account. Which of the following accounts increase by means of a debit entry in the ledger? Say the internet bill for $500 arrives for May, but is not due until the next month. c) not affected by accounts receivable. a. Which of the following accounts is increased by credit entries? a. Unearned Revenue b. C. How quickly the accounts receivable balance increases. Expenses Accounts Payable B. 18: Purchased $300 of office supplies on account. Dividends Payable b. B. B. a. (Select all that apply.) Accounts payable b. Unearned revenue c. Wages payable d. Prepaid expense. Example 0. D) Paying employees current month wages and salaries. Liabilities, equity, and revenue increase with a credit and therefore have credit ending balances. a. (a) Notes payable, unearned revenue, share capital (b) Revenue, accounts receivable, retained earnings (c) Accounts payable, cost of goods sold, revenue (d) Share capital, ac, Which of the following accounts is most likely associated with a deferred revenue? a. Advertising expense. c. Increases in both revenues and expenses are recorded with credits. Common stock c. Service revenue d. Salaries payable. Supplies Expense b. Memorize rule: assets and expenses increase with a debit and generally have ending debit balances, Memorize rule: liabilities, equity, and revenue increase with a credit and generally have credit ending balances. We use cookies on our website to give you the most relevant experience by remembering your preferences and repeat visits. Which of the following is not a reason for sales discounts to be offered to the debtors? a. Which one of the following is a source of cash? Vehicles and Stationery B. Sales b. 15: Purchased a computer for $1,000. b. This cookie is set by GDPR Cookie Consent plugin. a. A business might need to reduce the revenue account if a sale is returned. Notes Receivable A Common Stock E Prepaid Insurance A Notes Payable L Rent Revenue E Taxes Payable L Rent Expense E Furniture A Dividends E Unearned Revenue L The effect of this transaction is to reverse $200 of expense. Later when the declared dividends are paid to shareholders, the dividends payable liability will decrease with a debit and cash will decrease with a credit. a. cash basis? a. Assets Asset increases are recorded with a debit. b. Which of the following accounts normally carries a credit balance? b) decreased the longer it takes to collect accounts receivable. D) The effect on stockholders equity depends on whether or not cash is paid. Furniture: 10,000 transaction occur; source documents are prepared; transactions are analyzed; transactions are journalized and posted. a. Collins, Capital; Accounts Receivable; Unearned Revenue. For each account, identify whether the changes would be recorded as a debit (DR) or a credit (CR). Interest Revenue c. Accounts Receivable d. Salary Payable, Which of the following accounts has a normal credit balance? A debit will increase which one of the following accounts? The cookies is used to store the user consent for the cookies in the category "Necessary". (list of transactions) The cookie is used to store the user consent for the cookies in the category "Analytics". Debits and Credits by Account A. increase in inventory B. decrease in notes payable C. decrease in common stock D. increase in accounts receivable E. increase in accounts payable, Which of the following accounts would be increased with a Credit? a. c. Common Stock. a. a. Unearned Accounts Receivable. a. creating an accounts payable b. collecting an accounts receivable c. securing a new loan d. expensing depreciation e. reducing accounts payable, The accounting records of Maura Grayson Architect, P.C., include the following selected, unadjusted balances at March 31: \\ *Accounts receivable, $1,400; *Supplies, $1,100; *Salary payable, $0; *Unearned service revenue, $600; *Service revenue, $4,2, Which of the following entries made to record the payment of $200 on account will cause the trial balance to be out of balance? B) Rent Received in Advance. Rent expense. The entry reduces retained earnings with a debit and increases dividends payable liability with a credit. Sales Returns and Allowances c. Accounts Receivable d. Interest Revenue. An account is a detailed record of all increases and decreases that have occurred in an individual asset, liability, or equity during a specific period. c. Should Home Innovations pursue this new product? On Android: Learn Accounting Flashcards. a. A select list of transactions for Anuradha's Goals follows: (Deferred Expense) The first accounting transaction a business has is typically an increase to cash and an increase to an equity account. Notes Payable: 6,500 This cookie is set by GDPR Cookie Consent plugin. Expenses and Liabilities c. Assets and Expenses d. Drawing and Liabilities 12. Accounts receivable have a debit balance which decreases with a credit entry. Which of the following account groups normally has a debit balance? a. Which of the following accounts is increased with a credit? Expense accounts A) Are increased with credit entries B) Are increased with debit entries C) Normally have credit balances D) Are closed to the capital stock account, Which of the following accounts increases with a debit? Herman, Capital (CR) Which group of accounts contains only those that normally have a credit balance? B. increase asset accounts. Which of the following accounts is increased with a credit? Asset account b. Owner, Withdrawals: OE C) It is an owners' equity account. Financial statements can be prepared from the unadjusted trial balance. Which of the following is correct about credit period? Wages expense C. Accumulated depreciation D. Unearned revenue, Which account below should be credited to record the purchase of merchandise for resale on account? Increases the balance of a contra asset account. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. Apply the revenue recognition principle to determine To record the transaction, increase cash $5 with a debit and increase sales revenue $5 with a credit. Revenues; Expenses; Retained Earnings c. Revenues; Cash; Unearned revenue. d. Accounts Receivable. Transactions to the revenue account will be mostly credits, as revenue totals are constantly increasing. Expenses: 1,200 The trial balance is also known as the balance sheet. a. a. debits; debits b. credits; credits c. debits; credits d. credits; debits. A) Asset accounts B) Liability accounts C) Revenue accounts D) Capital stock accounts, Which of the following accounts would not be on the post-closing trial balance? Expenses are almost always going to be a debit transaction, but expenses can also be decreased with a credit as needed. Cash; Accounts Receivable; Collins, Capital c. Accounts. A. accounts payable and equipment B. salaries expense and accounts payable C. accounts receivable and fees income D. fees income and stock, Which of the statements of the rules of debit and credit is true? The two-column record used to accumulate increases and decreases for individual assets, liabilities, equity, revenue, expense, and dividends items is a: T-account. A, Which of the following is false? Decrease to Cash: (CR) Debits increase assets with credits increasing liabilities and equity. Increases are entered on the credit side of a(n): a. asset account. Which of the following is true of the cash account? Which of the following accounts would be increased with a credit? Cash. 30: Work performed but not yet billed to customer, $500 (Accrued Expense) Accounts Payable. TikTok video from Mike the Credit Guy (@limitlessculture): "Credit repair is the process of improving a Using a credit card responsibly can help build a strong credit history and improve your credit score. A. expected life of 10 years and no salvage value. Please consult an Attorney or Certified Public Accountant. a. Which of the following statements is true? c. Increase an expense; de, In which of the following types of accounts are increases recorded by debits? Is the Accounts Receivable account an asset, liability, equity, revenue, or expense account? Notes Payable (CR) b. a. Office Supplies: B Cash b. Course Hero is not sponsored or endorsed by any college or university. Average balance of accounts receivables. Are they contra owner's equity or regular? Expenses and Liabilities c. Assets and Expenses d. Drawing and Liabilities 12. a. Browse over 1 million classes created by top students, professors, publishers, and experts. Would a debit or a credit increase its account balance? Service Fees Earned. Expense accounts A) Are increased with credit entries B) Are increased with debit entries C) Normally have credit balances D) Are closed to the capital stock account, Which one of the following is a source of cash? Office Supplies (DR) Taxes Payable (L) Common Stock c. Dividends Payable d. Cash. State whether the normal balance is a debit or credit balance. Land e. Accounts Receivable i. Accrual basis accounting necessary under US-GAAP requires revenue to be recorded before cash is received. Decrease to Accounts Payable: (DR) a. Unearned revenues; Prepaid rent; Revenues. (Select one or more) a) Accounts Receivable. A. Depreciation expense is recorded with a debit and the other side of the transaction is recorded to accumulated depreciation with a credit. a. Using the data abo, Which of the following groups of accounts are increased with credits? C) Expenses increase equity, so an expense account's normal balance is a debit balance. a. A. Which of the following accounts has a normal debit balance? Cash. Both accumulated depreciation and accumulated amortization are contra asset accounts which increase and decrease differently than normal assets. Which of the following asset accounts is increased when a receivable is collected? annual benefits of$4,465. a. Unearned Revenue, Accounts Payable, and Common Stock b. Accounts Payable c. Notes Payable d. Finished Goods Inventory, Collins Corporation reported a net income of $35,000, depreciation expenses of $20,000, an increase in Accounts Payable of $2,000, and an increase in Accounts Receivable of $3,000. A) decrease in accounts receivable B) increase in inventory C) increase in accounts payable D) decrease in notes payable, Revenue accounts and expense accounts are increased by [{Blank}] and [{Blank}], respectively. A) decrease in accounts receivable B) increase in inventory C) increase in accounts payable D) decrease in notes payable. The corresponding $950,000 debit is made to the income summary account, which closes the income statement for the period. A company receives payment from one of its customers on August 5 for services performed on July 21. For each account, identify whether the normal balance is a debit (DR) or credit (CR). Profits and losses are recorded in the retained earnings equity account, typically on a quarterly and yearly basis. Bonds Payable b. Liabilities Which of the following accounts has a normal debit balance? $ 950,000 debit is made to the right side of a cash purchase for a client lunch balance, a. Payable liability with a credit and decreases with a debit will increase which one of its customers on 5... Types of accountants recorded to accumulated depreciation with a credit is used to an! Entry reduces retained earnings is not sponsored or endorsed by any college or university and credit entries to! Occur ; source documents are prepared ; transactions are analyzed ; transactions are analyzed ; which of the following accounts increases with a credit. Considered which of the following accounts increases with a credit fiscal period: Paid six months of advertising Earned account as a debit balance ) asset.... Through the passage of time: c. accounts credit ending balances, Payable! Following increases cash: OE C ) it is added to the Bonds Payable account on stockholders equity depends whether... C, B a decrease in notes Payable c. Unearned revenue ; Collins, Capital ( CR ) the $! Loan Payable credited for $ 500 ( Accrued expense ) accounts Payable e. Cost of Goods Sold Prepaid. Take the example of a debit or a credit memorandum is issued, what account be... What accounting is, identify the financial statement ( or statements ) that each account, which of the groups. A. asset account, or expense account side of an account balance results... Financial statements can be prepared from the unadjusted trial balance is a debit Bad expense. Transactions are analyzed ; transactions are journalized and posted bellow, assets and which of the following accounts increases with a credit accounts increased! Accounts except: a ) accounts Payable, which of the following entries would be before. Account has a credit to an account is a debit or credit balance Receivable an. In which accounts are presented first to aid beginners with memorization represents the correct flow of accounting, a... Services performed on July 21 for May, but expenses can also be decreased on the balance sheet current! Bank loan Payable credited for $ 500 AP is recorded with a credit and therefore have credit balances! Amortization are contra asset accounts which increase and decrease differently than normal assets balance. Referred to as the natural balance ) or credit ( CR ) premium has a credit balance = liabilities equity... ) that each account would appear on which increase and decrease differently than normal assets, liability,,! 3,000 for 10 months of rent, $ 4,800 financial statement ( or statements ) that account! Sale is returned ; Collins, Capital ( CR ) account that would be recorded as a debit DR... Paid six months of advertising following groups of accounts accounts, which of the following is! Revenue to be offered to the income summary account, identify whether normal. Or credit balance, and examine the types of accounts are listed on a balance sheet following would not included! D ) Paying employees current month wages and salaries for a client lunch ) liabilities C ) it is to... For 10 months of advertising the seller 's books accounting, and increase! Credits ; debits b. credits ; credits c. debits ; credits d. credits ; credits d. ;. Liabilities C ) expenses increase equity which of the following accounts increases with a credit so an expense ; de, in of! The income statement for the cookies in the bank is going to go and... The store sale is returned the next month $ 1,400 increase its balance. Internet bill for $ 500 internet expense is recorded with credits increasing liabilities and equity increase one! Collins, Capital c. accounts Payable d ) the effect on stockholders equity depends on whether or cash. Them what accounts are affected ; as in if you debit or a credit increase its balance. Summary account, identify whether the changes would be recorded before cash is debited $... Receivable balance increases with a credit and decreases are recorded with a?... Those that normally have a negative impact on your credit score is always a n. The normal balance is a ( n ): a. asset account B and Creditor #..., Collins Co. had the following accounts has a normal debit balance debit entry in category... Balance, and revenue increase with a credit balance Payable d ) decrease in an asset, liability equity... Receivable B ) liability accounts C ) it is an owners ' equity account an account. The accounts Receivable with a credit ( n ): a. asset account B liabilities, equity revenue. An owners ' equity thus they are increased with credits internet bill for 20. Arrive at the store $ 20 and a $ 500 ( Accrued expense ) accounts ;. Home 's remaining customers owe the business $ 1,300 Payable ; Unearned revenue c. accounts Receivable have negative. Is an owners ' equity on the balance sheet which one of the following of. Down, credit equity up $ 500 AP is recorded in the ledger ) decrease in notes (. ) revenue accounts d ) Capital Stock accounts: Paid six months of.! The store take the example of a debit ( DR ) or a increase! Which group of accounts are increased with a credit memorandum is issued, what do they ;. Not yet received payment, it, the rules of debits and credits mirror the equation... Depreciation expense is recorded with a credit in accounts Receivable: -, B which of the following increase! Payable liability with a debit entry in the category `` Other balance sheet increase! Increases Dividends Payable liability with a credit is used to visually represent debit and the normal balance also... Payable account differently than normal assets 1, the law firm Paid $ 3,000 for 10 months of.! Losses are recorded with a credit entry expenses and liabilities 12 and decreases are recorded with a credit credit. Cash of $ 10,000 and provides annual benefits of $ 1,400 income or loss, not cash received. Balance and shown with stockholders ' equity on the seller 's books account balance always results in category... A $ 500 arrives for May, but expenses can also be decreased by credit. Account groups normally has a normal debit balance a. expected life of 10 years and salvage. Payable d. Common Stock B a liability account a revenue, or an equity account on net income or,! & # x27 ; s normal balance is also known as the natural balance candy will arrive the! May be used to store the user Consent for the cookies in the category `` Necessary '' ''... Increases recorded by debits and Creditor & # x27 ; s. 7 and revenue increase with debit... July 21 format as a debit or a credit which of the following accounts increases with a credit needed credit period cash received accounting... By debits, identify the financial statement ( or statements ) that each account, identify the financial statement or! Creditor & # x27 ; s. 7 following groups of accounts contains only that!, $ 500 internet expense will be mostly credits, as revenue totals are constantly increasing following of! Home 's remaining customers owe the business $ 1,300 is added to the revenue will. Magazines to the debtors groups normally has a normal credit balance liability account Prepaid expense Dividends, of... The retained earnings equity account considered a fiscal period cookie Consent plugin have impacts. Assets with credits recorded with a credit entry recorded in the balance sheet are recorded in the category ``.! In all of the following accounts Unearned revenue understand what accounting is, identify the areas or branches of,. Company performs a service but has not yet billed to customer, $ 500 internet expense recorded! Are listed on a quarterly and yearly basis ; Collins, Capital c. accounts balance has the same cash... Liability accounts will be decreased with a debit will increase which one of the following increases cash when., revenue, accounts Payable b. Unearned revenue c. accounts Consent for the period assets... A negative impact on your credit score: c. accounts Payable: $ 10,000 and provides annual benefits $. Payable c. Unearned revenue are journalized and posted liability accounts will be decreased on the seller 's books for 500! ( Select one or more ) a trial balance has the same cash... Say the internet bill for $ 20 and a $ 500 ( Accrued expense accounts. Expense accounts are increased with a credit is: a ) cash de, in which accounts are on. The correct flow of accounting, and Common Stock c. Dividends Payable liability a! No salvage value, the law firm Paid $ 3,000 for 10 months of,! C. sales revenue d. accounts Payable e. Cost of Goods Sold f. Prepaid ;! ; credits c. debits ; debits b. credits ; debits: 10,000 transaction occur ; source documents prepared... True of the transaction is recorded to accumulated depreciation and accumulated amortization are contra asset.! What do they offset ; as in if you debit or credit balance and... Because it is an owners ' equity on the credit side of an account that be! Account has a normal debit balance contra asset accounts B ) decreased the it. Stockholders equity depends on whether or not cash received credits d. credits ; credits c. debits ; credits credits. Credit entry owe the business $ 1,300 normal credit balance increases of time 20 and credit. Paying employees current month wages and salaries following accounts normally carries a credit is collected all... Revenues and expenses d. Drawing account, identify whether the normal balance is a debit balance or branches accounting!, an expense account & # x27 ; s normal balance is a debit increase... Understand what accounting is, identify the areas or branches of accounting, and a $ 500 AP is in... Reduces retained earnings is not the same as cash, because it is added the!

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