Rules of Debit and Credit as Applied to Balance Sheet

question 36

Essay

Rules of debit and credit as applied to balance sheet accounts
Items in the balance sheet are classified into three categories: assets,liabilities,and owners' equity.
(A. )Identify by name two ledger accounts in each of the first two categories above (assets and liabilities)and one owners' equity account.State whether each account would normally have a debit or credit balance.
(B. )Describe briefly the rules of debits and credits as applied to the three categories of balance sheet accounts: asset accounts,liability accounts,and owners' equity accounts.

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Definitions:

Budget Deficit

The situation in which a government's expenditures exceed its revenue, resulting in the need to borrow money or increase taxes.

Loanable Funds

Describes the market where savers supply funds for loans to borrowers, influencing interest rates and investment.

Government Budget Deficit

A government budget deficit occurs when a government spends more money than it receives in revenue over a given period.

Foreign-Currency Exchange

The trading of currencies from different countries against each other.