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Remember the basic accounting equations Assets = Liabilities + Owners Equity (Stockholders Equity)
Assets increase with a debit
Liabilities as well as Equity increase with a credit
Liabilities have a credit balance (meaning you must credit the account to "increase" it and debit the account to "decrease" it) this makes liabilities a credit.
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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.
What kind of an account (asset liability etc.) is Allowance for Doubtful Accounts and is its normal balance a debit or a credit?
What kind of an account (asset, liability, etc.) is Allowance for Doubtful Accounts, and is its normal balance a debit or a credit?
Is interest payable a credit or debit?
Interest payable is liability account and have a credit balance as a normal balance.
What is a debit and how do you get one?
A debit is what occurs when you reduce a credit balance in a liability account such as a checking account. A debit can occur using a debit card, endorsed check, ATM withdrawl or withdrawl for the bank teller.
The account type and normal balance of prepaid expenses?
1. asset, debit 2. expense, debit 3. revenue, credit 4. liability, credit which one of them???
Is a contra account a debit or credit account?
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.
Is a mortgage repayment for a business a credit or a debit entry?
Credit to cash, debit to the liability account for the mortgage.
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.
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.
What kind of an account (asset liability etc.) is Allowance for Doubtful Accounts and is its normal balance a debit or a credit?
What kind of an account (asset, liability, etc.) is Allowance for Doubtful Accounts, and is its normal balance a debit or a credit?
What is the entry for bank loan account?
Debit Bank Account - Assets Credit Bank Loan Account - Liability
Is interest payable a credit or debit?
Interest payable is liability account and have a credit balance as a normal balance.
What are accrued expenses reported on the balance sheet as?
As you accrue expenses, they show up as a CREDIT on the balance sheet, and a DEBIT on the income statement. Then as you actually incur the expense and pay out, you would CREDIT your cash account, and DEBIT the accrued liability account on the balance sheet. For example, if you expect to spend $12,000/year on business travelling expenses, you would accrue $1000 monthly as a CREDIT to your accrued liability account (on the balance sheet), then a DEBIT to the expense account (on the income statement). When you actually do incur the expense and pay out, you CREDIT your cash account, and DEBIT the accrued liability account. Thus, the accrued liability account is cleared out and eventually washed out to zero.
Where do you File warranties in bookeeping?
Companies must accrue estimated warranty expenses. The journal entry to accrue the expenses is a debit to warranty expense, and a credit to an accrued warranty liability account. When warranties are paid the debit is to the warranty liability account and the credit is to the cash or bank account.
What is a debit and how do you get one?
A debit is what occurs when you reduce a credit balance in a liability account such as a checking account. A debit can occur using a debit card, endorsed check, ATM withdrawl or withdrawl for the bank teller.
What would be the accounting entry for an unpaid FBT liability?
You would debit FBT expense on your Profit and Loss and credit the FBT payable account - then when the liability is paid you would Debit FBT payable and credit bank
The account type and normal balance of prepaid expenses?
1. asset, debit 2. expense, debit 3. revenue, credit 4. liability, credit which one of them???
