Question

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Question 16 Which group of accounts is comprised of only assets? Cash, Accounts Payable, Buildings Accounts Receivable, Revenue, Cash Prepaid Expenses, Buildings, Patents Unearned Revenues, Prepaid Expenses, Cash Question 17 Which of the following applications of the rules of debit and credit is true? decrease Prepaid Insurance with a credit and the normal balance is a credit increase Accounts Payable with a credit and the normal balance is a debit increase Equipment with a debit and the normal balance is a debit decrease Cash with a debit and the normal balance is a credit Homework1B-....doc Homework1B-...doc 25 RO tv MacBook Ai

Answer 1

Answer for Question No:16

Prepaid Expenses, Building, patents --- All are Assets

Explanation

1st option-Cash and Building are assets but Accounts payable is a Liability

2nd option- Accounts Receivable and cash are assets but Revenue is transferred to Owner's equity (retained earnings) after deducting all Expenses

3rd option-prepaid Expenses, Building and patent all are assets so it is correct answer

4th option- prepaid Expenses and cash are assets but unearned Revenue is liability

Answer for Question No:17

Increase Equipment with a debit and the Normal Balance is a Debit --- is true (rules of debit and credit)

Explanation:

Normal Balance is the Accounting classification of an Account,it the part double entry bookkeeping technique

Normal balance of common Accounts

Assets-Debit

Liabilities-credit

Equity-Credit

Revenue- credit

Expense- debit

1st option: Normal balance of Prepaid insurance always debit balance ( Prepaid insurance is Asset(Assets consists always debit balance) decrease prepaid insurance with credit but Normal Balance is given credit so this is wrong

2nd option: Account payable is Liability (Liabilities consists always credit balance) so Normal balance of Account payable is must be credit but given Debit so it is wrong

3rd option Normal Balance of equipment is Debit balance because Equipment is a Asset,Assets consists debit balances

it is correct

4th option: Normal Balance of cash is debit because cash is asset but gvien as credit so it is wrong

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