ACC: 3-3 Analyze How Transactions Affect Equity Accounts

Which account has a normal credit balance?

• Owners’ Capital

• Owners’ Distributions

• Revenue

• Expenses

What happens to equity balance when Owners’ Distributions increase?

• Increases

• Decreases

• Remains the same

• Cannot be determined

What is the impact on equity balance when Revenue increases?

• Decreases

• Remains the same

• Increases

• Cannot be determined

When an expense occurs, what happens to the equity account classification?

• Increases

• Decreases

• Remains the same

• Cannot be determined

What is the normal balance for Owners’ Distributions?

• Credit

• Debit

• Cannot be determined

• Remains the same

In the transaction where cash is received for services performed, which account gets credited?

• Owners’ Capital

• Owners’ Distributions

• Revenue

• Expenses

In the transaction where services are sold on account, which account gets debited?

• Owners’ Capital

• Expenses

• Owners’ Distributions

• Revenue

In the transaction where cash is paid for office rent expense, which account gets credited?

• Owners’ Capital

• Owners’ Distributions

• Revenue

• Expenses

In the transaction where cash is paid for social media ad, which account gets debited?

• Owners’ Capital

• Expenses

• Revenue

• Owners’ Distributions

What happens to equity balance when Advertising Expense increases?

• Remains the same

• Decreases

• Increases

• Cannot be determined