Which of the following is true regarding normal balances of accounts?

Which of the following is true regarding normal balances of accounts? a. all accounts have a normal debit balance. b. accounts that have a normal debit balance will only have debit entries, never credit entries. c. the normal balance of all accounts will have either a positive or negative balance. d. the normal balance is on the increase side of the account.

Answers

"d.The normal balance is on the increase side of the account." is TRUE.

Explanation: The option "A" is false because not all accounts have a debit balance. There are accounts with debtor balance and accounts with creditor balance.

Option "B" is false because all accounts can have debit and credit entries, even if they have a debit balance.

Option "C" is false because the accounts have no positive and negative results, they have debit and credit balances.

"Income accounts" are those that reflect a positive and negative result, according to the dynamic equity equation if they have a debit balance they reflect a negative result and if they have a credit balance they reflect a positive result.

                               

a.Account payable         debit Decreasecredit Increase

b.advertising expensedebit Increase       credit Decrease

c.Service revenue        debit Decreasecredit Increase

d.Account Receivable  debit Increase         credit  Decrease

e. retained earnings  debit Decreasecredit Increase

f.dividends                  debit Decreasecredit Increase

Explanation:

Assets are a company's resources—things the company owns. Examples of assets include cash, accounts receivable, inventory, prepaid insurance, investments, land, buildings, equipment, and goodwill. From the accounting equation, we see that the amount of assets must equal the combined amount of liabilities plus owner's (or stockholders') equity.

Liabilities are a company's obligations—amounts the company owes. Examples of liabilities include notes or loans payable, accounts payable, salaries and wages payable, interest payable, and income taxes payable (if the company is a regular corporation). Liabilities can be viewed in two ways:

(1) as claims by creditors against the company's assets, and

(2) a source—along with owner or stockholder equity—of the company's assets.

Owner's equity or stockholders' equity is the amount left over after liabilities are deducted from assets:

Assets - Liabilities = Owner's (or Stockholders') Equity.

Owner's or stockholders' equity also reports the amounts invested into the company by the owners plus the cumulative net income of the company that has not been withdrawn or distributed to the owners.

$154,400

Explanation:

net realizable value = accounts receivable - allowance for bad debts

net realizable value = $159,000 - $4,600 = $154,400

The allowance for bad debts account is a contra asset account that reduces accounts receivables account since it adjusts debts that are not expected to be paid.

a. Accounts Payable                                    

Effect of a debit - Decrease

Effect of a credit - Increase

Normal balance - Credit

b. Advertising Expense

Effect of a debit - Increase

Effect of a credit - Decrease

Normal balance - Debit

c.  Service Revenue

Effect of a debit - Decrease

Effect of a credit - Increase

Normal balance - Credit

d. Accounts Receivable

Effect of a debit - Increase

Effect of a credit - Decrease

Normal balance - Debit

e. Retained Earnings

Effect of a debit - Decrease

Effect of a credit - Increase

Normal balance - Credit

f. Dividends

Effect of a debit - Increase

Effect of a credit - Decrease

Normal balance - Debit

Explanation:

Debit balances for example expenses and assets such as cash, accounts receivable, inventory etc. are increased by debits and decreased by credits.

Credit balances for example revenue, share capital, retained earnings, liabilities such as accounts payable, debt etc. are increased by credits and decreased by debits.

a. Accounts Payable

Accounts payable have a credit balance and will increase under credit effect and decrease under debit effect.

b. Advertising Expense

Advertising expense has a debit balance and will increase in case of debit effect and decrease in case of credit effect.

c. Service Revenue

Service revenue will be credited and will increase in case of credit effect and decrease in case of debit effect.

d. Accounts Receivable

Accounts receivables will be debited and increase under debit effect and decrease under credit effect.

e. Retained Earnings

Retained earnings will be credited and will increase in case of credit effect and decrease in case of debit effect.

f. Dividends

Dividends will be debited which will lead to an increase in it under debit effect and decrease under credit effect.

a. Land  -  Asset, Debit, Dr

b. Cash  - Asset, Debit, Dr

c. Legal Expense  - Expense, Debit, Dr

d. Prepaid Insurance  - Asset, Debit, Dr

e. Accounts Receivable  - Asset, Debit, Dr

f. Dividends  - Equity, Credit, Cr

g. License Fee Revenue  - Revenue, Credit, Cr

h. Uneaned Revenue  - Liability, Credit, Cr

i. Fees Earned  - Revenue, Credit, Cr

j. Equipment  - Asset, Debit, Dr

k. Notes Payable  - Liability, Credit, Cr

l. Common Stock - Equity, Credit, Cr

Explanation:

Assets, liabilities and equity are the elements of a balance sheet. These 3 elements form the accounting equation which is given as

Assets = Liabilities + Equity

Assets usually have a debit balance while equity and liabilities are usually credit balances. Expenses like assets usually have a debit balance while revenue usually has a credit balance.

Account payable: both

Cash: both

Dividends: debit

Miscellaneous Expense: debit

Insurance expense: debit

Fees Earned: credit

Explanation:

Account payable will have a normal credit balance.

It will be credited when a purchases on account are made.

And debited when payment on this accounts occurs.

Cash: represent the cash of the company

It increase when collected or received. And decrease when used on payment.

Dividends: debit, only used when dividends are declared

Miscellaneous Expense: debit each time a common expense is made

Insurance expense: debit each time it is accrued through time the expired portion of the insurance policy.

Fees Earned: credit each time the company earns from providing their services.

Answer with Explanation:

Land, Cash, Prepaid Insurance, Accounts Receivables and Equipment are Asset Account and normal balances are Debit in nature. This means the increase in asset account would be Debited and vice versa.

Legal expense is an Expense account which is Debit in nature which means that increase in expense account would be Debited and vice versa.

The revenues earned which includes License fee revenue and Fees earned in this case are revenue account and is credit in nature which means that increase in it would be credited and vice versa.

The dividends are Drawings account which is debit in nature which means increase in it would be debited and vice versa.

Common stock is equity account which is credit in nature which means increase in it would be credited and vice versa.

Notes Payable and Unearned revenue is liability account and liability is credit in nature, this means that increase in liability would be credited.


Identifying type and normal balances of accounts LO C4 For each of the following

(1) identify the t

IDk and IDC

Explanation:

I dont know why tho

NET Account Receivable 154,400

Explanation:

Account Receivable 159,000

Allowance for Bad debts (4,600)

NET Account Receivable 154,400

The allowance is the contra-assets account which adjust account receivable.

the bad debt expense is an expense, it doesn't go in the balance sheet.

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