Question

Question:The expanded accounting equation consists of assets, liabilities, common stock, dividends, revenues, and expenses. It can be used to reveal insights into changes in a company’s financial position.

Required

1. Form learning teamsof six (or more) members. Each team member must select one of the six components, and each team must have at least one expert on each component: (a) assets, (b) liabilities, (c) common stock, (d) dividends, (e) revenues, and ( f) expenses.

2. Form expert teamsof individuals who selected the same component in part 1. Expert teams are to draft a report that each expert will present to his or her learning team addressing the following:

a. Identify for its component the (i) increase and decrease side of the account and (ii) normal balance side of the account.

3. Each expert should return to his/her learning team. In rotation, each member presents his/her expert team’s report to the learning team. Team discussion is encouraged.

Short answer

Answer

The assets, expenses, and withdrawals are debited or an increase and have debit balance whereas income, liabilities, and capital are credited for an increase and have credit balances

Step-by-step solution

Normal balance of the account and increase/decrease

Normal balance of the account is the balancing figure that is carried forward in the next period. For example, the balancing figure of the cash account that would be carried forward in the next period would be the normal balance for the current period.

The increase or decrease side of the accounts depends upon the nature of the account.

Listed components with their normal balance side and increase or decrease side

Component	Increase Side	Decrease Side	Normal Balance
Assets	Debit	Credit	Debit
Liabilities	Credit	Debit	Credit
Common Stock	Credit	Debit	Credit
Dividends	Debit	Credit	Debit
Revenues	Credit	Debit	Credit
Expenses	Debit	Credit	Debit