QQuestionAccounting
QuestionAccounting
"The following table summarizes the rules of debit and credit. Indicate whether the proper answer is a debit or a credit.
Line Item Description Increase Decrease Normal Balance
Balance sheet accounts:
Asset
Credit
Liability Credit
Stockholders' equity:
Common Stock Credit
Retained Earnings
Credit
Dividends Debit Credit
Income statement accounts:
Revenue
Credit
Expense
Credit Debit"
4 months agoReport content
Answer
Full Solution Locked
Sign in to view the complete step-by-step solution and unlock all study resources.
Step 1: Identify the normal balance for each account based on the table.
The normal balance for an asset is a debit, while the normal balance for both liability and stockholders' equity (including common stock and retained earnings) is a credit. Revenue has a normal credit balance, and expense has a normal debit balance.
Step 2: Answer whether the proper answer is a debit or a credit based on the normal balance and the increase or decrease in each account.
Balance sheet accounts: - Asset (Increase): Debit - Asset (Decrease): Credit - Liability (Increase): Credit - Liability (Decrease): Debit - Stockholders' equity: Common Stock (Increase - issuing new shares): Credit - Stockholders' equity: Retained Earnings (Increase - earnings): Credit - Stockholders' equity: Retained Earnings (Decrease - dividends): Debit - Stockholders' equity: Dividends (Increase): Debit Income statement accounts: - Revenue (Increase): Credit - Revenue (Decrease): Debit - Expense (Increase): Debit - Expense (Decrease): Credit
Final Answer
- Asset (Increase): Debit - Asset (Decrease): Credit - Liability (Increase): Credit - Liability (Decrease): Debit - Common Stock (Increase): Credit - Retained Earnings (Increase - earnings): Credit - Retained Earnings (Decrease - dividends): Debit - Dividends (Increase): Debit - Revenue (Increase): Credit - Revenue (Decrease): Debit - Expense (Increase): Debit - Expense (Decrease): Credit
Need Help with Homework?
Stuck on a difficult problem? We've got you covered:
- Post your question or upload an image
- Get instant step-by-step solutions
- Learn from our AI and community of students