Question

For each of the following accounts indicate the effects of a debit and a credit on the accounts and the normal balance of the account.
1. Accounts Payable
2. Advertising Expense
3. Service Revenue
4. Accounts Receivable
5. Common Stock
6. Dividends

Answer 1

Answer:

1. Accounts Payable  - Debit reduces the balance, credit increases it. It normally has a credit balance

2. Advertising Expense  -  Debit increase it and credit reduces it. Itb normally has a debit balance

3. Service Revenue  - Debit reduces the balance, credit increases it. It normally has a credit balance

4. Accounts Receivable  - Debit increase it and credit reduces it. Itb normally has a debit balance

5. Common Stock  - Debit reduces the balance, credit increases it. It normally has a credit balance

6. Dividends - Debit increase it and credit reduces it. Itb normally has a debit balance

Explanation:

Assets and expenses normally have debit balances and are items in the balance sheet and income statement respectively. Revenue and liabilities normally have credit balances and are elements of the income statements and balance sheet respectively.