LUl he trial balance is to test the rcording of transactions. B) analysis of tra

Question

LUl he trial balance is to test the rcording of transactions. B) analysis of transactions C) equality of debit and credit entries in the journal. D) equality of debit and credit balances in the ledger 20. Which of the following accounts has a normal credit balance? A) Trucks and Automobiles B) Interest Expense C) Advertising Fees Eamed D) Owner's Withdrawals 21. Unearned revenues are classified as liabiities on the balance shee. A) True B) False 22. Owner's withdrawals are classified as an expense. A) True B) False 23. Wages payable is a type of expense. A) True B) False 24. A credit means that an account has been increased. A) True B) False 25. For a T account, an account balance is the difference in total dollars betw footings and total credit footings. A) True B) False 26. A decrease in a liability is recorded by a debit. A) True B) False

Explanation / Answer

20)  Liabilities, revenues and sales, gains, and owner equity and stockholders' equity accounts normally have credit balances. Therefore, advertisent fee earned is revenue and sales.

Option C is correct advertisent fee earned.

21) Unearned revenue is classified as current liability in balance sheet.

option A True

22) Owner's withdrawal are a reduction of owner's equity, but are not a business expense.

Option B False

23) wages payable is an current liablity

Option B False

24) The term Credit doesnot mean increase or decrease as these are based on the type of account. Credit in account payable means increase while credit in building is decrease.

Option B False

26) Decrease in liability is recorded by a debit.

Option A True

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