1. What is the effect (increase or decrease) of a credit to a revenue account (a) in terms of stockholders' equity and (b) in terms of revenue?
2. Regan Company adheres to a policy of depositing all cash receipts in a bank account and making all payments by check. The cash account as of August 31 has a credit balance of $1,200, and there is no undeposited cash on hand. (a) Assuming that no errors occurred during journalizing or posting, what caused this unusual balance? (b) Is the $1,200 credit balance in the cash account an asset, a liability, stockholders' equity, a revenue, or an expense?
3. Tull Company performed services in June for a specific customer for a fee of $2,230. Payment was received the following July. (a) Was the revenue earned in June or July? (b) What accounts should be debited and credited in (1) June and (2) July?