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Contingent liability is not shown in financial statments until it if considerably clear that liability will be happend and until that time it is shown as a note in notes to financial statement section.
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Is liability credit or debit?
Increase liabilities = credit Decrease labilities = debit
Does a debit decrease liability?
Yes, a debit decrease liability and a credit increase liability. if a debtors/customer make the repayment obligation, it will decrease debtors, meaning decrease in liability.
Are accrued expenses a debit or credit balance?
credit because it is a liability.
Does accrued salaries have a debit or credit balance?
Credit; liability accounts are always credit
Is land a credit or debit?
Debit - expense or asset Credit - income or liability As land is an asset, it is a debit entry with the credit being to Bank/Cash/Sellor of the land
Is liability credit or debit?
Increase liabilities = credit Decrease labilities = debit
Will Letter of credit be shown as contingent liabilities?
Yes, the letter of credit are to be shown as Contingent Liability. As the occurrence of this liability depends on the happening or non happening of uncertain future event.
Does a debit decrease liability?
Yes, a debit decrease liability and a credit increase liability. if a debtors/customer make the repayment obligation, it will decrease debtors, meaning decrease in liability.
Is a mortgage repayment for a business a credit or a debit entry?
Credit to cash, debit to the liability account for the mortgage.
What is the purchase of equipment on credit recorded by?
A debit to equipment and a credit to liability
Are accrued expenses a debit or credit balance?
credit because it is a liability.
Does accrued salaries have a debit or credit balance?
Credit; liability accounts are always credit
How is a liability increased by a credit or debit?
Liability has credit balance as normal balance so credit increases the liability which means addition to current liability will increase the overall liability and reduction in liability will reduce overall liability.
Is land a credit or debit?
Debit - expense or asset Credit - income or liability As land is an asset, it is a debit entry with the credit being to Bank/Cash/Sellor of the land
What would decrease liability?
Debit balance would decrease the liability as credit balance increases the liability.
Why increasing a liability account with a credit when increasing an asset account with a debit?
Liability has credit balance as normal balance so credit joins credit and increases it while assets has debit balance as normal balance so debit and credit cannot join together like plus plus is equals to plus.
Is a contra account a debit or a credit?
That depends, it could be either. a contra-asset account would be just the opposite of an asset. All assets have a debit balance (increase with debit) therefore a contra-asset account would be a credit. The same holds true with a contra-liability account, it is just the opposite, a liability maintains a credit balance (increases with a credit) therefore a contra-liability account would be a debit.
