Debits and Credits

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If you have difficulty answering the following questions, learn more about this topic by reading our Debits and Credits Explanation.

1. A company receives $500 of cash as an additional investment in the company by its owner, Mary Smith. The company's Cash account is increased and Mary Smith, Capital is increased.
   
   

   a.	Should the $500 entry to the Cash account be a debit?	Yes	No
   b.	Should the $500 entry to Mary Smith, Capital be a debit?	Yes	No

   
   
   
   
   
2. A company performed services on account in August. The services were for $2,000 and the company gave the customer credit terms that state the amount is to be paid to the company in September.
   
   

   a.	Assuming that the company prepares monthly income statements, what will be the account debited for $2,000 in August?
   Cash              Accounts Receivable              Service Revenue

   
   
   

   b.	Which account should the company credit for $2,000 in August?
   Cash              Accounts Receivable              Service Revenue

   
   
   

   c.	In September when the company receives the $2,000 from the customer, which account should the company debit?
   Cash              Accounts Receivable              Service Revenue

   
   
   

   d.	In September when the company receives the $2,000 from the customer, which account should the company credit?
   Cash              Accounts Receivable              Service Revenue

   
   
   
   
   
3. To increase the balance in the following accounts, would you debit the account or would you credit the account?
   
   

   a.	Accounts Payable	Debit	Credit
   b.	Cash	Debit	Credit
   c.	Land	Debit	Credit
   d.	Notes Payable	Debit	Credit
   e.	Accounts Receivable	Debit	Credit
   f.	Mary Smith, Capital	Debit	Credit
   g.	Supplies	Debit	Credit
   h.	Supplies Expense	Debit	Credit
   i.	Prepaid Insurance	Debit	Credit
   j.	Service Revenue	Debit	Credit
   k.	Mary Smith, Drawing	Debit	Credit
   l.	Equipment	Debit	Credit
   m.	Unearned Revenue	Debit	Credit

   
   
   
   
   
4. To decrease the balance in the following accounts, would you debit the account or would you credit the account?
   
   

   a.	Accounts Payable	Debit	Credit
   b.	Cash	Debit	Credit
   c.	Land	Debit	Credit
   d.	Notes Payable	Debit	Credit
   e.	Accounts Receivable	Debit	Credit
   f.	Mary Smith, Capital	Debit	Credit
   g.	Supplies	Debit	Credit
   h.	Supplies Expense	Debit	Credit
   i.	Prepaid Insurance	Debit	Credit
   j.	Service Revenue	Debit	Credit
   k.	Mary Smith, Drawing	Debit	Credit
   l.	Equipment	Debit	Credit
   m.	Unearned Revenue	Debit	Credit

   
   
   
   
   
5. What is the normal balance for the following accounts?
   
   

   a.	Accounts Payable	Debit	Credit
   a.	Cash	Debit	Credit
   c.	Land	Debit	Credit
   d.	Notes Payable	Debit	Credit
   e.	Accounts Receivable	Debit	Credit
   f.	Mary Smith, Capital	Debit	Credit
   g.	Supplies	Debit	Credit
   h.	Supplies Expense	Debit	Credit
   i.	Prepaid Insurance	Debit	Credit
   j.	Service Revenue	Debit	Credit
   k.	Mary Smith, Drawing	Debit	Credit
   l.	Equipment	Debit	Credit
   m.	Unearned Revenue	Debit	Credit