ANswer key
All income (also called revenue) is recorded as a credit. All expenses and debt are recorded as debits.
Asset accounts:
Cash, bank, accounts receivable, inventory, land, buildings/plant, machinery, furniture, equipment, vehicles, trademarks and patents, goodwill, prepaid expenses, debtors (people who owe us money), etc.
Liability accounts:
Accounts payable, salaries and wages payable, income taxes, bank overdrafts, trust accounts, accrued expenses, sales taxes, advance payments (unearned revenue), debt and accrued interest on debt, etc.
All of the accounts listed in this subsection are payables.
Equity accounts:
Capital, drawings, common stock, accumulated funds, etc.
Income/Revenue accounts:
Services rendered, sales, interest income, membership fees, rent income, interest from investment, recurring receivables, etc.
Expense accounts:
Telephone, water, electricity, repairs, salaries, wages, depreciation, bad debts, stationery, entertainment, honorarium, rent, fuel, etc.
3.Prepaid insurance is a asset account with a debit balance
http://www.accountrain.com/debit_credit.html
PROCESSING TRANSACTION OF A MERCHANDISER
Available sale - merchandise invetory= cost of salesAll income (also called revenue) is recorded as a credit. All expenses and debt are recorded as debits.
Asset accounts:
Cash, bank, accounts receivable, inventory, land, buildings/plant, machinery, furniture, equipment, vehicles, trademarks and patents, goodwill, prepaid expenses, debtors (people who owe us money), etc.
Liability accounts:
Accounts payable, salaries and wages payable, income taxes, bank overdrafts, trust accounts, accrued expenses, sales taxes, advance payments (unearned revenue), debt and accrued interest on debt, etc.
All of the accounts listed in this subsection are payables.
Equity accounts:
Capital, drawings, common stock, accumulated funds, etc.
Income/Revenue accounts:
Services rendered, sales, interest income,
Asset accounts:
Cash, bank, accounts receivable, inventory, land, buildings/plant, machinery, furniture, equipment, vehicles, trademarks and patents, goodwill, prepaid expenses, debtors (people who owe us money), etc.
Liability accounts:
Accounts payable, salaries and wages payable, income taxes, bank overdrafts, trust accounts, accrued expenses, sales taxes, advance payments (unearned revenue), debt and accrued interest on debt, etc.
All of the accounts listed in this subsection are payables.
Equity accounts:
Capital, drawings, common stock, accumulated funds, etc.
Income/Revenue accounts:
Services rendered, sales, interest income, membership fees, rent income, interest from investment, recurring receivables, etc.
Expense accounts:
Telephone, water, electricity, repairs, salaries, wages, depreciation, bad debts, stationery, entertainment, honorarium, rent, fuel, etc.
3.Prepaid insurance is a asset account with a debit balance
http://www.accountrain.com/debit_credit.html
PROCESSING TRANSACTION OF A MERCHANDISER
Available sale - merchandise invetory= cost of salesAll income (also called revenue) is recorded as a credit. All expenses and debt are recorded as debits.
Asset accounts:
Cash, bank, accounts receivable, inventory, land, buildings/plant, machinery, furniture, equipment, vehicles, trademarks and patents, goodwill, prepaid expenses, debtors (people who owe us money), etc.
Liability accounts:
Accounts payable, salaries and wages payable, income taxes, bank overdrafts, trust accounts, accrued expenses, sales taxes, advance payments (unearned revenue), debt and accrued interest on debt, etc.
All of the accounts listed in this subsection are payables.
Equity accounts:
Capital, drawings, common stock, accumulated funds, etc.
Income/Revenue accounts:
Services rendered, sales, interest income,