Question

Identifying type and normal balances of accounts LO C4 For each of the following

(1) identify the type of account as an asset, liability, equity, revenue, or expense;
(2) identify the normal balance of the account; and
(3) select debit (Dr.) or credit (Cr.) to identify the kind of entry that would increase the account balance.

Answer 1

Answer with Explanation:

Land, Cash, Prepaid Insurance, Accounts Receivables and Equipment are Asset Account and normal balances are Debit in nature. This means the increase in asset account would be Debited and vice versa.

Legal expense is an Expense account which is Debit in nature which means that increase in expense account would be Debited and vice versa.

The revenues earned which includes License fee revenue and Fees earned in this case are revenue account and is credit in nature which means that increase in it would be credited and vice versa.

The dividends are Drawings account which is debit in nature which means increase in it would be debited and vice versa.

Common stock is equity account which is credit in nature which means increase in it would be credited and vice versa.

Notes Payable and Unearned revenue is liability account and liability is credit in nature, this means that increase in liability would be credited.