For each of the following (1) identify the type of account as an asset, liabilit

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) select debit (Dr.) or credit (Cr.) to identify the kind of entry that would increase the account balance.

Type of
Account

Account

Type of
Account

Normal
Balance Increase
(Dr. or Cr.) a. Fees Earned b. Equipment c. Notes Payable d. Common Stock e. Cash f. Legal Expense g. Prepaid Insurance h. Land i. Accounts Receivable j. Dividends k. License Fee Revenue l. Unearned Revenue

Explanation / Answer

(2) and (3) are always the same. The type of entry that would increase the account balance will also be the normal balance

Expense, Asset, Dividend, and Drawing accounts are increased with debits and decreased with credits.
Revenue, Liability, Capital Stock, and Owner's Capital accounts are increased with credits and decreased with debits.

Asset:
b. Equipment
e. Cash
g. Prepaid Insurance
h. Land
i. Accounts Receivable

Liability:
c. Notes Payable
l. Unearned Revenue

Equity
d. Common Stock
j. Dividends

Revenue
k. License Fee Revenue
a. Fees Earned

Expense
f. Legal Expense

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