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QUESTION:

The property, plant and equipment account normally maintains a credit balance.

o True

o False

1. Use the template below to indicate how the following transactions affect the accrual basis accounting equation: a. Kissimm

2. Prepare the JEs for transactions (a)-(p) above. Ref Account description Debit Credit (a) $100,000 Cash Contributed capital

Key ideas: i. A journal is a chronological recording of transactions using debits and credits (debit simply means left, and c

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Answer #1

False, Property plant and Equipment does not normally maintain a credit balance

Thumb rule - All Assets maintain a debit balance

Property, Plant and Equipments are the Fixed assets that an entity purchase to use in the course of business (example - manufacturing plant is used for production, office equipments used for administrative works,etc)

When a Property, Plant and Equipment is purchased by a business, the Property, Plant and Equipment account is debited and either Cash or the Accounts payable account would be credited in the Journal

The value of Property, Plant and Equipment in the balance sheet reduces over time due to provision of depreciation year on year, but the same cannot fall below 'zero'.Hence the Property,Plant and Equipment would normally maintain a debit balance (Property,Plant and Equipment can either have a 'Debit' balance or a 'zero' balance only)

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