Question

The following is a list of accounts and their balances for Benson Company for the month ended June 30, 20xx. Prepare a trial balance in good form. Then answer questions 7 - 10. Cash $1,370 Benson, Withdrawals $ 500 Accounts Payable 770 Accounts Receivable 1,600 Office Equipment 900 Service Fees 2,730 Benson, Capital 1,500 Salaries Expense 630 9. The Account Payable account has which of the following balances? Question 9 options: Debit balance of 2730 Credit balance of $2730 Debit balance of $770 Credit balance of $770

Answer 1

Solution and explanantion

Answer for Q7 - Debit balance of $1,370

Cash has a debit normal balance.

Practically speaking the cash balance will be credit only if cash is negative which can never happen.

Answer for Q8 - Credit balance of $1500

All equity accounts have credit normal balance except withdrawal or dividend accounts.

Answer for Q9 - Credit balance of $770

All liabilities have credit normal balance.

Answer for Q10 - $5000

Working

                                    Trial balance

                                         Debit                         Credit

Cash                                $1,370.00  

Accounts receivable          $ 1,600.00  

Office equipment                  $ 900.00  

Benson withdrawal         $ 500.00  

Benson capital                                                  $   1,500.00

Accounts payable                                                   $   770.00

Salaries expense                       $ 630.00  

Service revenue                                                     $  2,730.00

                                              $  5,000.00            $  5,000.00