Question

Selected accounts from the ledger of Garrison Company appear below. For each account, indicate the following:

a. In the first column at the right, indicate the nature of each account, using the following abbreviations: Asset - A Revenue - R Liability - L Expense - E None of the above - N
b. In the second column, indicate the increase side of each account by inserting "Dr." for Debit or "Cr." for Credit.
Account Type of Account Increase Side
(1) Supplies
(2) Fees Earned
(3) Retained Earnings
(4) Accounts Payable
(5) Salaries Expense
(6) Common stock
(7) Accounts Receivable
(8) Equipment
(9) Notes Payable

Answer 1

Each account from the Garrison Company ledger has a specific type such as Asset, Liability, Equity, Revenue, or Expense, and increases either on the debit or credit side according to accounting principles. Assets and expenses typically increase on the debit side, while liabilities, equity, and revenues increase on the credit side.

Step-by-step explanation:

When categorizing the selected accounts from the ledger of Garrison Company, we can define the type of account and the increase side using the fundamental principles of accounting, specifically the double-entry system where every entry to an account requires a corresponding and opposite entry to a different account. The following is the categorization and the increase side for the given accounts:

(1) Supplies - Type of Account: Asset (A), Increase Side: Debit (Dr.)

(2) Fees Earned - Type of Account: Revenue (R), Increase Side: Credit (Cr.)

(3) Retained Earnings - Type of Account: Equity (N), Increase Side: Credit (Cr.)

(4) Accounts Payable - Type of Account: Liability (L), Increase Side: Credit (Cr.)

(5) Salaries Expense - Type of Account: Expense (E), Increase Side: Debit (Dr.)

(6) Common Stock - Type of Account: Equity (N), Increase Side: Credit (Cr.)

(7) Accounts Receivable - Type of Account: Asset (A), Increase Side: Debit (Dr.)

(8) Equipment - Type of Account: Asset (A), Increase Side: Debit (Dr.)

(9) Notes Payable - Type of Account: Liability (L), Increase Side: Credit (Cr.)

Each T-account in a balance sheet uses a two-column format that separates assets from liabilities and owner's equity, showcasing how a double-entry accounting system works. Assets and expenses increase on the debit side, while liabilities, revenues, and equity increase on the credit side.

Answer 2

Answer & Explanation:

Account Type of Account Increase side

Supplies Asset Debit

Retained Earnings Capital Credit

Fees Earned Revenue Credit

Accounts Payable Liability Credit

Salary Expense Debit

Common Stock Asset Debit

Account Receivable Asset Debit

Equipment Asset Debit

Notes Payable Liability Credit