Chapter 2 Analyzing and Recording Business Transactions

31) Review the transactions below and determine whether you would use a debit or a credit to record the following changes. Indicate your decision by entering “Debit” or “Credit” in the right-hand column.

1. An increase in Wage Expense.

2. A decrease in Notes Payable.

3. An increase in Prepaid Insurance.

4. An increase in Common Shares.

5. A decrease in Office Supplies.

6. An increase in Dividends.

7. An increase in Revenue.

8. A decrease in Notes Receivable.

9. An increase in Advertising Expense.

10. A decrease in Cash.

32) For the following general ledger accounts, identify the normal balance of the account.

Example: Accounts Payable Credit

Accounts Receivable

Building

Cash

Common Shares

Dividends

Equipment

Inventory

Land

Notes Payable

Office Equipment

Office Supplies

Rental Expense

Service Revenue

Travel Expense

Utilities Expense

Wages Expense

33) For the accounts listed below, identify the type of account. Is it an (A) Asset, (L) Liability, (S) Shareholders equity, (R) Revenue, or (E) Expense.

Accounts Payable

Accounts Receivable

Building

Cash

Common Shares

Dividends

Equipment

Inventory

Land

Notes Payable

Office Equipment

Office Supplies

Rental Expense

Service Revenue

Travel Expense

Utilities Expense

Wages Expense