The financial statements of Corus Entertainment are shown in Appendix A at the back of this textbook. They contain the following selected accounts:
Interest Expense...................................Long-term debt
Cash and Cash Equivalents......................Prepaid expenses
Unearned Revenues..............................Sales
Inventories.........................................Accounts payable and accrued expenses
Instructions
(a) Answer the following questions:
1. In which financial statement is each account included?
2. Is it an asset, liability, revenue, or expense?
3. What is the normal balance (debit or credit) for each of these accounts?
4. What are the increase side and decrease side (debit or credit) for each of these accounts?
(b) Identify the probable other account(s) in the transaction, and the effect on that account(s), when:
1. Accounts payable and accrued expenses are decreased.
2. Long-term debt is increased.
3. Sales are increased.
4. Inventory is increased.
5. Prepaid expenses are increased.