Questions and Answers
What are the accounts affected when a new computer is purchased with 30 percent down and a bank note for the remainder?
What are the accounts affected when salaries for the month are paid from cash?
What accounts are affected when Kati Litchfield, the owner, withdraws cash for personal use?
What accounts are affected when office supplies are purchased on account?
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What accounts are affected when sales to guests are made on account?
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What accounts are affected when excess cash is invested in temporary investments?
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What accounts are affected when a supplier is paid on account for supplies purchased 20 days ago?
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What accounts are affected when rent for the following month is paid out of cash?
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What is the normal balance of an Asset Account?
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What is the normal balance of a Liability Account?
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What is the normal balance of an Owner's Equity Account?
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What is the normal balance of a Revenue Account?
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What is the normal balance of an Expense Account?
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How do you show an increase in an Asset Account?
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How do you show a decrease in an Asset Account?
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How do you show an increase in a Liability Account?
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How do you show a decrease in a Liability Account?
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How do you show an increase in an Owner's Equity Account?
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How do you show a decrease in an Owner's Equity Account?
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How do you show an increase in a Revenue Account?
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How do you show a decrease in a Revenue Account?
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How do you show an increase in an Expense Account?
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How do you show a decrease in an Expense Account?
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Study Notes
Debits and Credits Overview
- Equipment purchases involve debiting Equipment (Asset), crediting Cash (Asset), and crediting Notes Payable (Liability).
- Salary payments decrease Cash (Asset) and increase Salary (Expense) as a debit entry.
- Owner withdrawals affect Owner's Equity by debiting Kati, capital (Owner's Equity) and crediting Cash (Asset).
- Office supplies bought on account result in debiting Office Supplies (Asset) and crediting Accounts Payable (Liability).
- Sales on account increase Accounts Receivable (Asset) as a debit and revenue as a credit entry.
- Investing excess cash into temporary investments debits Market Securities (Asset) and credits Cash (Asset).
- Paying a supplier on account decreases Accounts Payable (Liability) via debit and decreases Cash (Asset) via credit.
- Prepaid Rent (Asset) is debited for rent paid in advance while Cash (Asset) is credited.
Normal Account Balances
- Asset Accounts typically have a normal balance of Debit.
- Liability Accounts typically have a normal balance of Credit.
- Owner's Equity Accounts generally have a normal balance of Credit.
- Revenue Accounts also generally have a normal balance of Credit.
- Expense Accounts normally have a balance of Debit.
Changes in Account Balances
- Increases in Asset Accounts are recorded as Debits.
- Decreases in Asset Accounts are recorded as Credits.
- Increases in Liability Accounts are recorded as Credits.
- Decreases in Liability Accounts are recorded as Debits.
- Increases in Owner's Equity Accounts are recorded as Credits.
- Decreases in Owner's Equity Accounts are recorded as Debits.
- Increases in Revenue Accounts are recorded as Credits.
- Decreases in Revenue Accounts are recorded as Debits.
- Increases in Expense Accounts are recorded as Debits.
- Decreases in Expense Accounts are recorded as Credits.
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Description
Enhance your accounting skills with this practice quiz on debits and credits. Each flashcard presents a scenario to determine the affected accounts and their classifications. Perfect for students and professionals looking to refine their financial knowledge.
