Question

What entry (debit or credit) would you make to: (a) increase revenue (b) decrease
in expense, (c) record drawings (d) record the fresh capital introduced by the owner.

Answer 1

The entries would be:

(a) Credited

(b )Credited

(c) Credited

(d) Credited

Explanation:

The entries that I would make in the context of debit or credit are as follows:

(a) Increase in revenue: This would be credited because it is an increase in the capital.

(b) Decrease in expense: This would be credited because the balance of the expenses are debit in nature and if an expense decreases, it gets credited.

(b) Record drawings: It is part of capital that has a credit balance. Therefore, drawings would be credited.

(d) Record of fresh capital that is introduced by the owner: This would be credited because it is an increase in the capital.