Question

For each item below, indicate whether a debit or credit applies.

a. Decrease in Notes Payable select an option
b. Increase in Dividends select an option
c. Increase in Common Stock select an option
d. Increase in Unearned Rent Revenue select an option
e. Decrease in Interest Payable select an option
f. Increase in Prepaid Insurance select an option
g. Decrease in Salaries and Wages Expense select an option
h. Decrease in Supplies select an option
i. Increase in Revenues select an option
j. Decrease in Accounts Receivable

Answer 1

Answer and Explanation:

The indication of each transaction is as follows

a. Note payable contains credit balance so if there is decrease so it would be shown on the debit side

b. Dividend contains debit balance so if there is an increase so it would be shown on the debit side

c. Common stock contains credit balance so if there is an increase so it would be shown on the credit side

d. Unearned rent revenue contains credit balance so if there is an increase so it would be shown on the credit side

e. Interest payable contains credit balance so if there is decrease so it would be shown on the debit side

f. Prepaid insurance contains debit balance so if there is an increase so it would be shown on the debit side

g. Expense contains debit balance so if there is an decrease so it would be shown on the credit side

h. Supplies contains debit balance so if there is an decrease so it would be shown on the credit side

i. Revenue contains credit balance so if there is an increase so it would be shown on the credit side

j. Account receivable contains debit balance so if there is an decrease so it would be shown on the credit side