Indicate whether a debit or credit decreases the normal balance of each of the following accounts.
Office Supplies- debit
Repair Service Revenue- debit
Interest Payable- debit
Accounts Receivable- creditSalaries Expense- debit
Owner Capital- credit
Prepaid Insurance- debit
Buildings-debit
Interest Revenue-credit
Owner Withdrawals-debit
Unearned Revenue-credit
Account Payable-debit
Identify whether a debit or credit yields the indicated change for each of the following accounts.
To increase Store Equipment- debit
To increase Owner Withdrawals- credit
To decrease Cash- debit-
To increase Utilities Expense- debit
To increase Fees Earned- credit
To decrease Unearned Revenue-debit
To decrease Prepaid Insurance- debit
To increase Notes Payable- debit
To decrease Account Receivable- credit
To increase Owner Capital- credit
Identify whether the normal balances (in parentheses) assigned to the following accounts are correct or incorrect.
Office supplies (Debit)- correct
Owner Withdrawals (Credit)- correct
Fees Earned (Debit)- correct
Wages Expense (Credit)
Cash (Debit)- correct
Prepaid Insurance(Credit)- correct
Wages Payable (Credit)- correct
Building (Debit)-correct
Unearned Revenue (Debit)- incorrect
To determine whether a debit or credit decreases the normal balance of each account, we need to understand the basic rules of accounting:
1. Assets: Debits increase the normal balance, while credits decrease it.
- Examples: Office Supplies (debit), Accounts Receivable (credit), Buildings (debit)
2. Liabilities and Equity: Debits decrease the normal balance, while credits increase it.
- Examples: Interest Payable (debit), Accounts Payable (debit), Owner Capital (credit), Unearned Revenue (credit), Owner Withdrawals (debit)
3. Revenue: Debits decrease the normal balance, while credits increase it.
- Examples: Repair Service Revenue (debit), Interest Revenue (credit), Fees Earned (credit)
4. Expenses: Debits increase the normal balance, while credits decrease it.
- Examples: Salaries Expense (debit), Utilities Expense (debit), Wages Expense (debit)
Now let's go through the given accounts and determine whether a debit or credit decreases their normal balance.
Office Supplies - Debit (Asset): A debit decreases the normal balance of an asset account like Office Supplies.
Repair Service Revenue - Debit (Revenue): A debit decreases the normal balance of a revenue account like Repair Service Revenue.
Interest Payable - Debit (Liability): A debit decreases the normal balance of a liability account like Interest Payable.
Accounts Receivable - Credit (Asset): A credit decreases the normal balance of an asset account like Accounts Receivable.
Salaries Expense - Debit (Expense): A debit increases the normal balance of an expense account like Salaries Expense.
Owner Capital - Credit (Equity): A credit decreases the normal balance of an equity account like Owner Capital.
Prepaid Insurance - Debit (Asset): A debit decreases the normal balance of an asset account like Prepaid Insurance.
Buildings - Debit (Asset): A debit decreases the normal balance of an asset account like Buildings.
Interest Revenue - Credit (Revenue): A credit decreases the normal balance of a revenue account like Interest Revenue.
Owner Withdrawals - Debit (Equity): A debit decreases the normal balance of an equity account like Owner Withdrawals.
Unearned Revenue - Credit (Liability): A credit decreases the normal balance of a liability account like Unearned Revenue.
Accounts Payable - Debit (Liability): A debit decreases the normal balance of a liability account like Accounts Payable.
Now let's move on to the next set of questions.