Answer: Please refer to Explanation
Explanation:
.a. Interest Revenue. This is EQUITY. It increase with a CREDIT. Normal Balance is CREDIT.
Interests Revenue is earned like revenue and as such is credited. In the balance sheet it will be with Equity as it increases the Retained Earnings of a firm.
b. Accounts Payable. LIABILITY.
Increases by CREDIT.
Normal Balance is CREDIT.
Accounts Payable are the result of buying goods on account meaning the firm owes the entities in question. It is credited to show an increase.
c. Common Stock. EQUITY.
Increases by CREDIT.
Normal Balance is CREDIT.
As a Capital balance, common stock is credited to show and increase and debited to show a decrease because it signifies that the business owes the holders/owners.
d. Office Supplies. ASSET
Increase by DEBIT.
Normal Balance is CREDIT.
As an asset, Office Supplies is recorded in the debit section and is debited to show increase.
e. Advertising Expense. EQUITY.
Increases by DEBIT.
Normal Balance is DEBIT.
Increases by DEBIT.
Advertising as an expense is taken from the Revenue. This makes it am Equity item. When it is debited, it increases and this normal Balance reflects a debit balance.
f. Unearned Revenue. LIABILITY.
INcrease is CREDITED
Normal Balance is CREDIT.
Unearned Revenue is a liability because the company owes performance to an entity for work that they have already been paid for. As such it's balance is increased by a Credit.
g. Prepaid Rent. ASSET.
Increase by DEBIT.
Normal Balance is DEBIT.
Prepaid rent means that the company paid for rent in advance and so it owed till the rent can be apportioned to a particular period. For this reason it is an asset and increases by DEBIT.
h. Utilities Expense. EQUITY.
Increases by DEBIT.
Nomal Balance is DEBIT.
As an expense that goes from the revenue it is an equity item and increases by debit. Normal Balance is also debit.
i. Dividends. EQUITY.
Increases by DEBIT.
Normal Balance is DEBIT.
Dividends are paid from Retained Earnings and as such belong in the Equity section. Dividends increase by being debited.
j. Service Revenue. EQUITY.
Increase by CREDIT.
Normal Balance is CREDIT.
As Revenue for the business it belongs in the EQUITY section. It is added to retained earnings and as it is revenue, it increases when it is credited.
