Book 1 - Chapter 22

Reinforcement Problems
LG	22-1.

Account	Natural Positive Side
	Dr.	Cr.
a. Supplies
b. Accounts Payable
c. Service Revenue
d. Cash
e. R. Penland, Drawing
f. R. Penland, Capital
g. Accounts Receivable
h. Rent Expense
i. Prepaid Rent
j. Equipment
k. Unearned Revenue
l. Notes Payable

22-2.

a.	…when a debit is to item on the left side of the equation (assets).
b.	…when a debit is to an item on the right side of the equation (liabilities and owner’s equity).
	(Note: expenses and withdrawals decrease owner’s equity, so expenses and withdrawals are recorded with debits.)
c.	…when a credit is to an item on the right side of the equation (liabilities and owner’s equity).
d.	…when a credit is to an item on the left side of the equation (assets).


LG 22-3.

	Assets	Liabilities	Owner’s Capital	Revenue	Expense	Drawing
Debit	Increase	Decrease	Decrease	Decrease	Increase	Increase
Credit	Decrease	Increase	Increase	Increase	Decrease	Decrease
Natural Positive Balance?	Dr.	Cr.	Cr.	Cr.	Dr.	Dr.

*Note: Natural positive balances (“normal balances”) are always on the increase side.

Learning Goal 22, continued

SOLUTIONS

Section V · Using a Basic Accounting System

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