How do I use normal balances when the answer choices are all journal entries?
Sometimes I see four entries and they all look plausible. How do I narrow them down?
Ignore the option wording at first and classify the accounts yourself. Assets and expenses normally increase with debits. Liabilities, equity, and revenue normally increase with credits. Then compare your expected direction with each option.
Suppose Juniper Hall buys 7,500 of supplies on account. Supplies, an asset, increases with a debit. Accounts payable, a liability, increases with a credit. Any option that credits supplies or debits accounts payable for the original purchase is reversing the normal balance effect.
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