C3: DEBITS & CREDITS

Question 1

The balance (debit or credit) that an account is normally expected to have.

Answer 1

Normal Balance

Question 2

Assets, expenses, and losses normally have ___________.

Answer 2

Debit balances

Question 3

Liabilities, shareholders’ equity, revenues, and gains normally have ___________.

Answer 3

Credit balances

Question 4

What indicates how the account is increased in a journal entry?

Answer 4

The normal balance

Question 5

What goes on each side of a T account?

Answer 5

Debits = Left
Credits = Right

Question 6

What abbreviations are used for debits and credits?

Answer 6

DR and CR

Question 7

To record an INCREASE in cash, we need to:

Answer 7

Debit the amount

Question 8

Assets, expenses, and losses are usually ______ balances.

Answer 8

Debit

Question 9

Credits ________ assets and __________ liabilities.

Answer 9

Decreases; Increases

Question 10

Credits are normally on the _______ side of a T account.

Answer 10

Right

Question 11

Liability (A/P), S/H Equity, and Revenues/Gains are usually _______ balances.

Answer 11

Credit

Question 12

Expenses and Dividends Declared normally have a ______ balance.

Answer 12

DR

Question 13

T/F: Revenue accounts have a debit balance.

Answer 13

False - CR balance

Question 14

Balance is carried from one period to another if the account is ___________.

Answer 14

Permanent

Question 15

Balance is transferred out of a temporary account at the __________________ to a permanent account.

Answer 15

End of the Period

Question 16

Assets, liability, and S/H Equity are examples of:

Answer 16

Permanent Accounts

Question 17

T/F: General journal summarizes info on each transaction.

Answer 17

False - detailed information but NOT a summary.

Question 18

Information for each ACCOUNT is summarized in the _____________.

Answer 18

General Ledger

Question 19

What are trial balances used to check?

Answer 19

If DR = CR

Question 20

Which account is NOT involved in adjusting entries?

Answer 20

Cash accounts

Question 21

When are adjusting entries made?

Answer 21

END of accounting period

Question 22

What are the two types of adjusting entries?

Answer 22

Accruals and Deferrals

Question 23

____________ required when revenue/expenses need to be recognized ________ cash is received/paid.

Answer 23

Accrual adjusting entry; BEFORE

Question 24

_________ adjusting entry is required when revenue/expenses need to be recorded _______ cash is received/paid.

Answer 24

Deferral adjusting entry; AFTER

Question 25

What is used to record reductions?

Answer 25

Contra-asset Account

Question 26

Contra-asset whose normal balance is CR.

Answer 26

Accumulated depreciation account

Question 27

What has full values of all company’s accounts receivable?

Answer 27

Carrying Amount

Question 28

___________ = Assets cost

Answer 28

Carrying Amount

Question 29

What are made at the END of the accounting period?

Answer 29

Closing Entries

Question 30

To reset an account’s balance to zero, we must use ________.

Answer 30

Closing Entries

Question 31

Revenue and Expense go into the ___________ account.

Answer 31

Income Summary

Question 32

Income Summary and Dividends Declared go into the _________ account.

Answer 32

Retained Earnings