2. State the rules of debit and credit as applied to (a) asset accounts, (b) liability accounts and (c) the stockholders’ equity accounts (revenue, expenses, dividends, common stock and retained earnings).
Answer | ||||||
RULES OF DEBIT AND CREDIT | ||||||
A) | Asset account | |||||
Debit when increases and Credit when decreases | ||||||
B) | Liability account | |||||
Credit when increases and Debit when decreases | ||||||
C) | Stock holders equity | |||||
1) | Revenues | |||||
Credit when increases and Debit when decreases | ||||||
2) | Expenses | |||||
Debit when increases and Credit when decreases | ||||||
3) | Dividends | |||||
Debit when increases and Credit when decreases | ||||||
4) | Common stock | |||||
Credit when increases and Debit when decreases | ||||||
5) | Retained earnings | |||||
Credit when increases and Debit when decreases |
2. State the rules of debit and credit as applied to (a) asset accounts, (b) liability...
Rules of Debit and Credit The following table summarizes the rules of debit and credit. Indicate whether the proper answer is a debit or a credit. Increase Decrease Normal Balance Balance sheet accounts: Asset Debit Liability Debit Credit Stockholders' equity: Common Stock Retained Earnings Dividends Credit Debit Credit Income statement accounts: Revenue Credit Expense Credit Debit
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State whether each of the following is an asset, liability,
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Normal Balances of Accounts Identify each of the following accounts of Liken Services Co. as asset, liability, stockholders' equity, revenue, or expense, and state in each case whether the normal balance is a debit or a credit.