Chat with AIExam 2: Recording Business Transactions
Identify the normal balance for asset and liability accounts.What is the reasoning behind the "normal balances" for these accounts?
(39) 
VerifiedUsing a T-account format,the normal balance of any account is the side that increases the balance in the account.For asset accounts the normal balance would be the debit side of the T-account.Asset accounts are often referred to as "debit-balance accounts." Crediting a liability account increases its balance,so it has a normal balance of a credit.Liability accounts are called "credit-balance accounts."
The reason why assets are debit-balance accounts and liabilities are credit-balance accounts is caused by the accounting equation."Assets equal liabilities plus shareholders' equity" means that asset and liability accounts must have opposite normal balances for the equation to balance.
Which of the following accounts normally has a debit balance?
(45) VerifiedA
List the types of accounts that appear on the income statement.List the types of accounts that appear on the balance sheet.
(34) VerifiedThe income statement contains accounts classified as revenues and expenses.The balance sheet contains accounts classified as assets,liabilities,and owners' equity.
The normal balance for any account is always the side of the account (debit or credit)where increases are recorded.
(39) An owner makes an investment of cash into the business.Such a transaction would include a:
(32) Posting is the process of copying the amounts from the journal to the appropriate accounts in the ledger.
(27) If a trial balance is in balance,the accountant is assured that no mistakes were made either in recording or posting.
(45) A balance sheet is a required financial statement that reports the financial position of the company as of a given day in time.
(36) Which of the following statements regarding accounts is incorrect?
(31) On a trial balance the total of all debits must equal the total of all credits.
(45) Prepare a trial balance for Salty Inc.dated June 30,2017,based on the following transactions that occurred during the month of June.
a.Owner invested $25,000 cash into the business and received common shares in return.
b.Rented an office and paid one month's rent,$900.
c.Purchased $400 of supplies on account.
d.Performed services on account,$5,500.
e.Paid $2,000 cash for office furniture.
f.Owner received a dividend of $700.
g.Collected $1,200 on account.
(30) The ledger provides a good indication of how much cash is available for the business to use.
(39) An accounts receivable represents the promise of the business to pay a debt.
(42) Define the term account and describe the relationship between accounts and the ledger.
(27) A trial balance is a list of all of a company's accounts with their account numbers.
(40) 
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