Chapter 2, Problem 5QS

Summary Introduction

Concept Introduction:

Assets: Assets are physical as well as intangible resources of the business which are kept to provide future economic benefits. All the assets have debit balances.

Liabilities: Liabilities are dues or amount payable by the business. All the liabilities have credit balances.

Equity: Equity represents the sum of capital and profits/ loss earned by the business owners. All the equity accounts have credit balances.

To identify: Whether a debit or a credit decreasesthe normal balances of each of the given accounts.