Question

The financial statements of Apple Inc. in Appendix A contain the following selected accounts, all in thousands of dollars.

Common Stock $35,867
Accounts Payable 49,049
Accounts Receivable 17,874
Selling, General, and Administrative Expenses 15,261
Inventories 4,855
Net Property, Plant, and Equipment 33,783
Net Sales 229,234

Required:
a. What is the increase and decrease side for each account?
b. What is the normal balance for each account?

Answer 1

Apple Inc.

a. The increase and decrease side for each account

($'000) Increase Decrease

Side Side

Common Stock $35,867 Credit Debit

Accounts Payable 49,049 Credit Debit

Accounts Receivable 17,874 Debit Credit

Selling, General, and Administrative Expenses 15,261 Debit Credit

Inventories 4,855 Debit Credit

Net Property, Plant, and Equipment 33,783 Debit Credit

Net Sales 229,234 Credit Debit

b. The normal balance for each account

($'000) Normal Balance

Common Stock $35,867 Credit Balance

Accounts Payable 49,049 Credit Balance

Accounts Receivable 17,874 Debit Balance

Selling, General, and Administrative Expenses 15,261 Debit Balance

Inventories 4,855 Debit Balance

Net Property, Plant, and Equipment 33,783 Debit Balance

Net Sales 229,234 Credit Balance

Step-by-step explanation:

Selected Accounts from Appendix A of Apple' Financial Statements:

($'000)

Common Stock $35,867

Accounts Payable 49,049

Accounts Receivable 17,874

Selling, General, and Administrative Expenses 15,261

Inventories 4,855

Net Property, Plant, and Equipment 33,783

Net Sales 229,234

b) Assets and Expenses increase by debit entries to their accounts, and they decrease by credit entries. They normally have debit balances. On the other hand, Liabilities, Equity, Revenue, and Income normally have credit balances. They increase by credit entries to their accounts and decrease by debit entries.