Question

State for each account whether it is likely to have (a) debit entries only, (b) credit entries only, or (c) both debit and credit entries when recording business transactions during the month. Also, indicate the normal balance of each account. 1. Fees Earned , normal balance 2. Utilities Expense , normal balance 3. Accounts Payable , normal balance 4. Supplies , normal balance 5. Cash , normal balance 6. Accounts Receivable , normal balance

Answer 1

Answer:

No. Account Type                                                 Likely account entries

1. Fees Earned , normal balance is credit          (b) Credit entries only

2. Utilities Expense , normal balance is debit     (a) Debit entries only

3. Accounts Payable , normal balance is credit  (c) both debit and credit entries

4. Supplies , normal balance is debit                  (c) both debit and credit entries

5. Cash , normal balance is debit                       (c) both debit and credit entries

6. Accounts Receivable , normal balance is debit (c) both debit and credit entries

Explanation:

Accounts that normally have debit entries include assets (both long-term and current), expenses, and losses.  Accounts that normally have credit entries are liabilities, equity, revenue, income or gains.  Most accounts have debit and credit entries before their normal balances are indicated. The accounts with debit entries are mainly expenses and losses, while revenues and income have mainly credit entries.