Question

B. Indicate whether the normal balance of the given account is a debit or a credit and whether the increase or

decrease in such account should be a debit or a credit. Check the appropriate box.

Normal Balance

Effect in the Account

Particulars

Debit

Credit

Debit

Credit

1. Equipment was sold for P 350,000.00

2. Notes Recievable was collected in full

3. Loans Payable in bank was paid in full

4. Office furnishings was acquired for

P 35,000.00

5. Insurance in premium for one year was

paid in November

Answer 1

Answer:

given below

Step-by-step explanation:

1. Equipment is credited and cash is debited.

2. Notes receivable is credited and cash is debited

3. Loan Payable is debited and cash account is credited

4.Office furnishings are debited and cash is credited.

5. Insurance in premium is debited and  cash is credited.

Summary

1) addition to an asset account is a debit

2) subtraction from an asset account is a credit

3) addition to a liability account is a credit

4) subtraction from a liability account is a debit

5) Bank account is credited when cash is added to it and debited when cash is withdrawn from it

Normal Balance             Effect in the Account       Debit        Credit

1) Equipment  350,000.00   decrease in asset  Cash         Equipment

2. Notes Recievable                                          Cash            N/R

3. Loans Payable    Dec. Accounts /Rec      Loans Payable    Cash

4. Office furnishings  35,000.00                   Office furnishings     Cash

5. Insurance in premium  (+aasets)          Insurance in premium  Cash

2. There was increase in cash and decrease in notes receivable.