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Debits and Credits

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If you have any difficulty answering the questions, learn more about this topic by reading our mini-lectures covering introductory to Debits and Credits.


  1. A company receives $500 of cash as an additional investment in the company by its owner, John Smith. The company's Cash account is increased and John Smith, Capital is increased.

     a. Should the $500 entry to the Cash account be a debit? Yes No
     b. Should the $500 entry to John Smith, Capital be a debit? Yes No


  2. A company performed services on account in August. The services were for $2,000 and the company gave the customer credit terms that state the amount is to be paid to the company in September.

     a. Assuming that the company prepares monthly income statements, what will be the account debited for $2,000 in August?
    Cash

    Accounts Receivable

    Service Revenue


     b. Which account should the company credit for $2,000 in August?
    Cash

    Accounts Receivable

    Service Revenue


     c. In September when the company receives the $2,000 from the customer, which account should the company debit?
    Cash

    Accounts Receivable

    Service Revenue


     d. In September when the company receives the $2,000 from the customer, which account should the company credit?
    Cash

    Accounts Receivable

    Service Revenue



  3. To increase the balance in the following accounts, would you debit the account or would you credit the account?

    a. Accounts Payable Debit Credit
    b. Cash Debit Credit
    c. Land Debit Credit
    d. Notes Payable Debit Credit
    e. Accounts Receivable Debit Credit
    f. John Smith, Capital Debit Credit
    g. Supplies Debit Credit
    h. Supplies Expense Debit Credit
    i. Prepaid Insurance Debit Credit
    j. Service Revenue Debit Credit
    k. John Smith, Drawing Debit Credit
    l. Equipment Debit Credit
    m. Unearned Revenue Debit Credit



  4. To decrease the balance in the following accounts, would you debit the account or would you credit the account?

    a. Accounts Payable Debit Credit
    b. Cash Debit Credit
    c. Land Debit Credit
    d. Notes Payable Debit Credit
    e. Accounts Receivable Debit Credit
    f. John Smith, Capital Debit Credit
    g. Supplies Debit Credit
    h. Supplies Expense Debit Credit
    i. Prepaid Insurance Debit Credit
    j. Service Revenue Debit Credit
    k. John Smith, Drawing Debit Credit
    l. Equipment Debit Credit
    m. Unearned Revenue Debit Credit



  5. What is the normal balance for the following accounts?

    a. Accounts Payable Debit Credit
    a. Cash Debit Credit
    c. Land Debit Credit
    d. Notes Payable Debit Credit
    e. Accounts Receivable Debit Credit
    f. John Smith, Capital Debit Credit
    g. Supplies Debit Credit
    h. Supplies Expense Debit Credit
    i. Prepaid Insurance Debit Credit
    j. Service Revenue Debit Credit
    k. John Smith, Drawing Debit Credit
    l. Equipment Debit Credit
    m. Unearned Revenue Debit Credit



6. Generally when an expense is involved in a transaction, an expense will be Debited Credited
7. Generally when revenues are involved in a transaction, a revenue account will be Debited Credited
8. The accountant's word to indicate that an entry will be recorded on the left-side of an account is Debit Credit
9. A contra-asset account such as Accumulated Depreciation will likely have which balance? Debit Credit
10. A contra-liability account such as Discount on Notes Payable will likely have which balance? Debit Credit

If you have any difficulty answering the questions, learn more about this topic by reading our mini-lectures covering introductory to Debits and Credits.

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