Corporate Financial Accounting
14th Edition
ISBN: 9781305653535
Author: Carl Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
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Chapter 2, Problem 2.4EX
Rules of debit and credit
The following table summarizes the rules of debit and credit. For each of the items A through L, indicate whether the proper answer is a debit or a credit.
| Increase | Decrease | Normal Balance | |
| Balance sheet accounts: | |||
| Asset | A | B | Debit |
| Liability | C | Debit | D |
| Stockholders’ equity: | |||
| Common Stock | Credit | E | F |
| G | H | Credit | |
| Dividends | Debit | Credit | 1 |
| Income statement accounts: | |||
| Revenue | J | K | Credit |
| Expense | L | Credit | Debit |
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Debit and Credit Procedures
A list of accounts for Montgomery Inc. appears below.
Required:
Complete the table below for these accounts. The information for the first account has been entered as an example.
Account
Type of Account
Normal Balance
Increase
Decrease
Accounts Payable
Liability
Credit
Credit
Debit
Accounts Receivable
SelectAssetContra AssetEquityExpenseLiabilityRevenueItem 1
SelectCreditDebitItem 2
SelectCreditDebitItem 3
SelectCreditDebitItem 4
Accumulated Depreciation
SelectAssetContra AssetEquityExpenseLiabilityRevenueItem 5
SelectCreditDebitItem 6
SelectCreditDebitItem 7
SelectCreditDebitItem 8
Cash
SelectAssetContra AssetEquityExpenseLiabilityRevenueItem 9
SelectCreditDebitItem 10
SelectCreditDebitItem 11
SelectCreditDebitItem 12
Common Stock
SelectAssetContra AssetEquityExpenseLiabilityRevenueItem 13
SelectCreditDebitItem 14
SelectCreditDebitItem 15
SelectCreditDebitItem 16
Depreciation Expense
SelectAssetContra AssetEquityExpenseLiabilityRevenueItem 17…
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.
Balance sheet accounts:
Asset
Liability
Owner's equity:
Capital
Drawing
Income statement
accounts:
Revenue
Expense
Increase
Credit
Credit
Decrease
Credit
Credit
Normal Balance
Credit
Debit
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.
Â
Increase
Decrease
Normal Balance
Balance sheet accounts:
Â
Â
Â
Â
Asset
Â
Â
Debit
Â
Liability
Â
Debit
Â
Â
Stockholders' equity:
Â
Â
Â
Â
Â
Common Stock
Credit
Â
Â
Â
Â
Retained Earnings
Â
Â
Credit
Â
Â
Dividends
Debit
Credit
Â
Income statement accounts:
Â
Â
Â
Â
Revenue
Â
Â
Credit
Â
Expense
Â
Credit
Debit
Chapter 2 Solutions
Corporate Financial Accounting
Ch. 2 - What is the difference between an account and a...Ch. 2 - Prob. 2DQCh. 2 - Prob. 3DQCh. 2 - eCatalog Services Company performed services in...Ch. 2 - If the two totals of a trial balance are equal,...Ch. 2 - Assume that a trial balance is prepared with an...Ch. 2 - Assume that when a purchase of supplies of 2,650...Ch. 2 - Assume that Muscular Consulting erroneously...Ch. 2 - Assume that Sunshine Realty Co. borrowed 300,000...Ch. 2 - Checking accounts are one of the most common forms...
Ch. 2 - Rules of debit and credit and normal balances...Ch. 2 - Prob. 2.2BECh. 2 - Journal entry for fees earned Prepare a journal...Ch. 2 - Journal entry for dividends Prepare a journal...Ch. 2 - Missing amount from an account On August 1, the...Ch. 2 - Trial balance errors For each of the following...Ch. 2 - Correcting entries The following errors took place...Ch. 2 - Prob. 2.1EXCh. 2 - Chart of accounts Innerscape Interiors is owned...Ch. 2 - Chart of accounts LeadCo School is a newly...Ch. 2 - Rules of debit and credit The following table...Ch. 2 - Normal entries for accounts During the month,...Ch. 2 - Normal balances of accounts Identify each of the...Ch. 2 - Transactions Zenith Consulting Co. has the...Ch. 2 - Journalizing and posting On October 3, 2018, Regal...Ch. 2 - Transactions and T accounts The following selected...Ch. 2 - Cash account balance During the month, Warwick Co....Ch. 2 - Account balances A. During February, 186,500 was...Ch. 2 - Retained earnings account balance As of January 1,...Ch. 2 - Identifying transactions Napa Tours Co. is a...Ch. 2 - Journal entries Based upon the T accounts in...Ch. 2 - Trial balance Based upon the data presented in...Ch. 2 - Trial balance The accounts in the ledger of...Ch. 2 - Effect of errors on trial balance Indicate which...Ch. 2 - Total of Credit column: 525,000 Error in triad...Ch. 2 - Effect of errors on trial balance The following...Ch. 2 - Errors in trial balance Identify the errors in the...Ch. 2 - Entries to correct errors The following errors...Ch. 2 - Prob. 2.22EXCh. 2 - Entries into T accounts and trial balance Marjorie...Ch. 2 - Journal entries and trial balance On October 1,...Ch. 2 - Journal entries and trial balance On November 1,...Ch. 2 - Journal entries and trial balance Elite Realty...Ch. 2 - Corrected trial balance The Lexington Group has...Ch. 2 - Entries into T accounts and trial balance Ken...Ch. 2 - Journal entries and trial balance On August 1,...Ch. 2 - Journal entries and trial balance On October 1,...Ch. 2 - Journal entries and trial balance Valley Realty...Ch. 2 - Corrected trial balance Tech Support Services has...Ch. 2 - The transactions completed by PS Music during June...Ch. 2 - Continuing Company AnalysisAmazon: Horizontal...Ch. 2 - Chipotle: Horizontal analysis Chipotle Mexican...Ch. 2 - Prob. 2.3ADMCh. 2 - Prob. 2.4ADMCh. 2 - Prob. 2.1TIF
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- JOURNAL ACCOUNTING EQUATION    DATE DESCRIPTION POST. REF. DEBIT CREDIT ASSETS LIABILITIES EQUITY 1         2         3         4         5         6         7         8         9         10         11         12         13         14         15         16         17         18         19arrow_forwardUse the following T-account for Careful Corporation to answer questions 11 and 12:             Accounts Receivable Beg. Bal.    $  187 18                 150  6                  64 15  19 End. Bal.      $      ?  The ending balance of Accounts Receivable for Careful is: Group of answer choices A. $401 debit B. $343 debit C. $343 credit D. $ 58 creditarrow_forwardWhich of the following groups of accounts increase with a credit? Oa. assets, common stock, revenues Ob. common stock, revenues, expenses Oc. liabilities, common stock, revenuesarrow_forward
- Accounts with normal credit balances include  Question 13 options:  Assets and liabilities  Revenues and expenses  Liabilities and revenues  Revenues and assetsarrow_forwardRules of debit and credit The following table summarizes the rules of debit and credit. For each of the items a through l, indicate whether the proper answer is a debit or a credit.arrow_forwardWhat is the impact on the accounting equation when an accounts receivable is collected? A. both sides increase B. both sides decrease C. only the Asset side changes D. the total of neither side changesarrow_forward
- Normal Account Balances Each account has a normal balance. For the following list of accounts, indicate whether the normal balance of each is a debit or a credit.arrow_forwardWhat information can best be elicited from a receivable ratio? A. company performance with current debt collection B. credit extension effect on cash sales C. likelihood of future customer bankruptcy filings D. an increase in future credit sales to current customersarrow_forwardIdentify the financial statement on which each of the following account categories would appear: the balance sheet (BS), the income statement (IS), or the retained earnings statement (RE). Indicate the normal balance (Dr for debit; Cr for credit) for each account category. Table 3.16arrow_forward
- Indicate how changes in these types of accounts would be recorded (Dr for debit; Cr for credit). Table 3.23arrow_forwardIndicate how changes in the following types of accounts would be recorded (Dr for debit; Cr for credit). Table 3.18arrow_forwardWhich of the following groups of accounts increase with a credit? a.common stock, revenues, expenses b.liabilities, common stock, revenues c.assets, common stock, revenues d.none of thesearrow_forward
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