Which of the following applications of the rules of debit and credit is true?
Q. decrease Prepaid Insurance with a credit and the normal balance is a credit A. Any prepaid a/c has a normal debit balance. To expense off the prepayment regularly, you’d debit the insurance a/c and credit the prepaid insurance a/c. That shd reduce the prepaid a/c until it’s 0 Q. increase Accounts Payable with a credit and the normal balance is a debit A. A/cs payable is always increased with a credit and the normal balance is a credit. Liabilities are credits. Q. increase Supplies Expense with a debit and the normal balance is a debit A. Any expense a/c is increased with a debit and the normal balance for expenses is a debit Q. decrease Cash with a debit and the normal balance is a credit A. Cash is normally a debit (unless you’re operating on an overdraft in which case it’s a credit) and you’d decrease cash with a credit, as when you’re making a payment.
