For Each of the Following Accounts Indicate (A) the Type

question 160

Essay

For each of the following accounts indicate (a) the type of account (Asset Liability Owner's Equity Revenue Expense) (b) the debit and credit effects and (c) the normal account balance. $\begin{array}{ll} \text {0. Cash } & \text {a. Asset account } \\& \text { b. Debit increases, credit decreases } \\& \text { c. Normal balance - debit } \\\end{array}$

$\begin{array}{llcc}&\text { Accounts }\\\hline \text { 1. Accounts Payable } && \text { 5. Service Revenue } \\ \text { 2. Accounts Receivable } && \text { 6. Insurance Expense } \\ \text { 3. Owner's Capital } & & \text { 7. Notes Payable} \\ \text {4. Owner's Drawings } && \text { 8. Equipment } \\\end{array}$

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Definitions:

Spending Variance

The difference between the actual amount spent and the budgeted amount for a particular period or item.

Actual Level

The real, measured level of production, performance, or activity, as opposed to planned or theoretical levels.

Spending Variance

The difference between the actual amount spent and the budgeted amount for a particular category or period, indicating over or under spending.

Planning Budget

A financial plan that estimates the revenue and expenses for a specific period, often used for setting performance expectations.