Question

For each of the following (1) identify the type of account as an asset, liability, equity, revenue, or expense, (2) identify the normal balance of the account, and (3) enter debit (Dr.) or credit (Cr.) to identify the kind of entry that would increase the account balance.
Account Type of Account Normal Balance Increase (Dr. or Cr.)
a. Cash
b. Legal Expense
c. Prepaid Insurance
d. Land
e. Accounts Receivable
f. Dividends
g. License Fee Revenue
h. Unearned Revenue
i. Fees Earned
j Equipment
k Notes Payable
l. Common Stock

Answer 1

Answer:

Explanation:

All profits generated and expenses incurred during a given period are recorded in the income statement.  

The Statement of equity of the stockholder contains the common stock and the retained earnings which could be used to determine the ending balance.  

The balance sheet reports the assets and liabilities of the company

The debit columns report assets and expenditures side while revenues stockholder equity and the liability side are reported in the credit column.

So, the categorization is shown below:

a. Cash  = Asset = Debit account = Debit balance

b. Legal Expense  = Expense = Debit account = Debit balance

c. Prepaid Insurance  = Asset = Debit account = Debit balance

d. Land  = Asset = Debit account = Debit balance

e. Accounts Receivable  = Asset = Debit account = Debit balance

f. Dividends  = Equity = Debit account = Debit balance

g. License Fee Revenue  = Revenue = Credit account = credit balance

h. Unearned Revenue  = Liability = Credit account = credit balance

i. Fees Earned  = Revenue = Credit account = credit balance

j Equipment  = Asset = Debit account = Debit balance

k Notes Payable   = Liability = Credit account = credit balance

l. Common Stock =  Equity = credit  account = credit balance