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(a)
Normal Balance: It is that balance of an account that it normally indicates an increase in the value, such as,
- Increase in asset is debited and so the normal balance of asset is debit balance
- Increase in liability is credited and so the normal balance of liability is credit balance
- Increase in
stockholder’s equity and so the normal balance of stockholders’ equity is credit balance - Increase in expense and so the normal balance of expense is debit balance
- Increase in income and so the normal balance of revenue is credit balance
To Identify: Increase and decrease side and normal balance of accounts.
(b) (1)
To Identify the probable other account in the transaction and the effect on that account.
(b) (2)
To Identify the probable other account in the transaction and the effect on that account.
Accounts Payable is decreased.
(b) (3)
To Identify the probable other account in the transaction and the effect on that account.
Inventories are increased.
(c) (1)
To identify the other account that ordinarily would be involved.
Research and Development Expense is increased.
(c) (2)
To identify the other account that ordinarily would be involved.
Property, Plant and Equipment are increased.
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Chapter 2 Solutions
Financial Accounting
- Oriole Company sells product 2005WSC for $55 per unit and uses the LIFO method. The cost of one unit of 2005WSC is $52, and the replacement cost is $51. The estimated cost to dispose of a unit is $6, and the normal profit is 40% of selling price. At what amount per unit should product 2005WSC be reported, applying lower-of-cost-or-market?arrow_forwardNonearrow_forwardGeneral accountingarrow_forward
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
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