Question

Assume all asset, dividend, and expense accounts have debit balances and all liability, stockholders' equity, and revenue accounts have credit balances?

Answer 1

When using T-accounts to represent a firm's financial transactions, assets are recorded on the left side while liabilities and stockholders' equity are recorded on the right side. In this case, since all asset, dividend, and expense accounts have debit balances, they are recorded on the left side (assets). On the other hand, since all liability, stockholders' equity, and revenue accounts have credit balances, they are recorded on the right side (liabilities and equity).

Step-by-step explanation:

The subject of this question is Business.

When using T-accounts to represent a firm's financial transactions, assets are recorded on the left side while liabilities and stockholders' equity are recorded on the right side. In this case, since all asset, dividend, and expense accounts have debit balances, they are recorded on the left side (assets). On the other hand, since all liability, stockholders' equity, and revenue accounts have credit balances, they are recorded on the right side (liabilities and equity).

For example, in a bank's T-account, reserves, bonds, and loans would be recorded on the left side as assets, while deposits and equity would be recorded on the right side as liabilities and equity.