Indicate whether each of the following statements is true or false.________ a) A debit entry to Cash is never accompanied by a credit entry to a revenue account.________ b) The adjustment for accrued salary expenses would include a debit to Salaries Expense and a credit to Salaries Payable.________ c) Adjusting entries will always include either a debit to an expense account or a credit to a revenue account.________ d) The closing entry for an expense account involves a debit to retained earnings and a credit to the expense account.________ e) The closing entry for a revenue account involves a debit to the revenue account and a credit to Retained Earnings.

Question

What will be an ideal response?

Answer 1

a) F b) T c) T d) T e) T
a) This is false. A company may provide services for cash, which would be recorded with a debit to cash and a credit to revenue.
b) This is true. Accruing salaries involves recording salaries expense (a debit) and increasing the liability salaries payable (a credit).
c) This is true. All adjusting entries increase expenses (debit) or increase revenue (credit).
d) This is true. The closing entry for an expense decreases both the expense and the retained earnings account, and involves a debit to retained earnings and a credit to the expense.
e) This is true. The closing entry for revenue decreases the revenue account and increases the retained earnings account, and involves a debit to the revenue account and a credit to retained earnings.