Chapter 3, Problem 11Q

(a)

To determine

Account:

An account refers to a financial record in the general ledger, where the increase or decrease in the values of the assets, liabilities, stockholder’s equity, revenues or expenditures of the business, pertaining to a particular period are recorded. Some of the accounts are assets, liabilities, and stockholder’s equity.

Assets:

Assets are the resources, owned by the company, that are used for the generation of income in the future. Assets are classified under four major heads which are as follows:

• Current assets
• Long-term investments
• Property, Plant and Equipment
• Intangible assets

Some of the examples of assets are equipment, accounts receivable, supplies, and cash.

Liabilities:

Liabilities refer to the financial debts or obligations, which the company is owed to its creditors. The creditors have the claims over the assets of the company. Some of the examples of the liabilities are accounts payable, unearned revenue, and income tax payable.

Stockholders’ equity:

Stockholder’s equity represents the capital contributed by the shareholders to its business and the revenues generated for the business. Stockholders’ equity is sometimes referred to as the net worth of the shareholders or stockholders. The two parts of stockholders’ equity are common stock and retained earnings.

Normal debit and credit balance:

The excess amount of debit side over the credit side is shown as the normal debit balance. The excess amount of credit side over the debit side is shown as the normal credit balance.

Type of account	Normal balance
Assets account	Debit balance
Liabilities account	Credit balance
Expense account	Debit balance
Revenue account	Credit balance
Dividends account	Debit balance

Table (1)

To indicate: whethereach of the following account is an asset, a liability, or a stockholder’s equity account and whether it would have a normal debit or credit balance.

(b)

To determine

To indicate: whethereach of the following account is an asset, a liability, or a stockholder’s equity account and whether it would have a normal debit or credit balance.

(c)

To determine

To indicate: whethereach of the following account is an asset, a liability, or a stockholder’s equity account and whether it would have a normal debit or credit balance.

(d)

To determine

To indicate: whethereach of the following account is an asset, a liability, or a stockholder’s equity account and whether it would have a normal debit or credit balance.

(e)

To determine

To indicate: whethereach of the following account is an asset, a liability, or a stockholder’s equity account and whether it would have a normal debit or credit balance.