Question

14. A debit may signify a(n): A. decrease in liability accounts B. decrease in the dividends account C. increase in the common stock account D. decrease in asset accounts

15. Which of the following types of accounts have a normal credit balance? A. liabilities and expenses B. common stock and dividends C. revenues and common stock D. assets and liabilities

16. A debit balance in which of the following accounts would indicate a likely error? A. Notes Payable B. Supplies C. Accounts Receivable D. Salaries Expense

17. Which of the following entries records the payment of an account payable? A. Debit Accounts Receivable; credit Cash B. Debit Accounts Payable; credit Cash C. Debit Cash; Credit Supplies Expense D. Debit Cash; credit Accounts Payable

18. Which of the following entries records the receipt of cash from clients on account? A. Accounts Receivable, debit; Fees Earned, credit B. Cash, debit; Accounts Receivable, credit C. Accounts Receivable, debit; Cash, credit D. Accounts Payable, debit; Fees Earned, credit

19. Which of the following groups of accounts increase with a credit? A. Common stock, revenues, expenses B. Labilities, common stock, revenues C. Assets, common stock, revenues D. None of these choices are correct

20. Which of the following situations increase stockholders’ equity? A. Services are provided on account B. Utility bill will be paid next month C. Cash is received from customers on account D. Supplies are purchased on account

Answer 1

14. A debit may signify a(n):
Correct Answer = Option A. decrease in liability accounts
This is because Liabilities have normal credit balance and are increased if credited and decreased if debited.

15. Which of the following types of accounts have a normal credit balance?
Correct Answer = Option C. revenues and common stock

16. A debit balance in which of the following accounts would indicate a likely error?
Correct Answer = Option A. Notes Payable
Because Notes payable is a Liability account which has a normal CREDIT BALANCE.

17. Which of the following entries records the payment of an account payable?
Correct Answer = Option B. Debit Accounts Payable; credit Cash

18. Which of the following entries records the receipt of cash from clients on account?
Correct Answer = Option B. Cash, debit; Accounts Receivable, credit
cash is debited because it is being received.

19. Which of the following groups of accounts increase with a credit?
Correct Answer = B. Labilities, common stock, revenues
This is because all 3 of these have a normal CREDIT balances which increases when credited and decreased when debited.

20. Which of the following situations increase stockholders’ equity?
Correct Answer = Option A. Services are provided on account
This is because Revenues = increased = net income = increased retained earnings = increased stockholder’s equity.