Question

During the month, Gates Labs Co. has a substantial number of transactions affecting each of the following accounts. State for each account whether it is likely to have (a) debit entries only, (b) credit entries only, or (c) both debit and credit entries.1. Accounts Payable2. Accounts Receivable3. Cash4. Fees Earned5. Insurance Expense6. Steve Campbell, Drawing7. Utilities Expense

Answer 1

Answer:

The answer for each requiremnt is given below.

1. Accounts Payable

both debit and credit entries-credit when buying good on account and debit when paying cash against it.

2. Accounts Receivable

both debit and credit entries-debit when selling good on account and credit when paying cash against it.

3. Cash

both debit and credit entries-credit when making payments and debit when receiving cash income.

4. Fees Earned

credit entries only- as fees is earned.

5. Insurance Expense

Debit entries only - as expense is incurred.

6. Steve Campbell, Drawing

Debit entries only - when Steve draws amount from business.

7. Utilities Expense

Debit entries only - as expense is incurred.