Question

For each of the following accounts indicate the effects of a debit and a credit on the accounts and the normal balance of the account.

1.Accounts Payable

2.Advertising Expense

3.Service Revenue

4.Accounts Receivable

5.Common Stock

6.Dividends

Answer 1

Answer with Explanation:

Remember that Liabilities and equities are credit in nature and this can be explained from the following equation:

Assets = Equity + Liabilities

Assets = (Common Stock + Revenue + Retained Earnings + Sales -Expenses - Dividends) + Liabilities

Assets + Expenses + Dividends = Common Stock + Revenue + Retained Earnings + Sales + Liabilities

This means Assets, expense and dividends on the left side are debit in nature and Common stock, revenue, retained earnings, sales and liabilities are credit in nature.