Q13E - Horngren'S Financial And Managerial Accounting

Question

Identifying increases and decreases in accounts and normal balances Insert the missing information into the accounting equation. Signify increases as Incr. and decreases as Decr.

 

(a) ASSETS Retained Earnings Common Stock (d) Revenues Expenses Contributed Capital (g) (p) (h) Credit (k) Debit (l) Credit (i) (q) (j) Credit Incr. (r) (m) Credit Decr. (o) (f) Credit (c) LIABILITIES (b)

Step-by-Step Solution

Answer

Assets help in generating some revenue in the future and the blanks are identified as per the requirement in Step 2.

Step 1 Definition of assets

Assets are the economic sources owned by the individuals or business organizations which is generating some benefits in future

Step 2 Identification of increase or decrease and debits or credits

(a) Assets - Accounting equation.

(b) Equity – Accounting Equation.

(c) liabilities – Accounting Equation.

(d) Dividends – Part of the Equity section of the accounting equation.

(e) Increase – Assets are increased when debited.

(f) Credit – Liabilities increase on credits.

(g) Decrease – Common stocks are decreased when debited.

(h) Increase – Common stocks are increased when credited.

(i) Increase – Dividends are increased when debited left side shows the debit.

(j) Decrease – Dividends decrease when credited.

(k) Decrease – Revenues always decrease when debited.

(l) Increase – Revenues are increased when credited.

(m) Decrease – Expense decreases when credited.

(n) Credit – Right side of the T-accounts.

(o) Debit – Liabilities decrease when debited.

(p) Debit – Left side of the t-account.

(q) Debit – Left side of the t-account is the debit side.

(r) Debit – Expenses are debited when increased.