Answer to Question #178332 in Accounting for Milan

Question

Debit Cash

Credit Dividend Income

• What is this journal entry mean? You are receiving cash and receiving revenue.

Debit Investment in Investee

Credit Equity in earnings

• What is this journal entry mean? You purchase investment and a sale occurs at the same time.

Debit Cash

Credit Investment

Credit Dividend Income

• What does this journal entry mean? You sold the investment and received cash in that investment. How does Dividend Income come into play?

Debit Equity in Earnings

Credit Investment in Investee

• What does this journal entry mean?

Debit Accounts Receivable

Credit Sales Revenue

• What does this journal entry mean? You sold services/product and you haven't received the money yet.
• For example, a company sells $5,000 of consulting services to a customer on credit. So, you sold the consulting services, but you haven't received the money yet. Your Asset Account Increases and your Revenue Account increases.

What does it mean when you Debit a Revenue Account?

Answer 1

Debit Cash

Credit Dividend Income

• This journal entry means that cash has increased by an equivalent of debited amount while dividend income has also increased by an equivalent of credited amount. This is a receipt of cash dividend.

Debit Investment in Investee

Credit Equity in earnings

• This journal entry means that investment has increased by an equivalent of debited amount while equity has also increased by an equivalent of credited amount. It simply means an increase in Investment.

Debit Cash

Credit Investment

Credit Dividend Income

• This journal entry means that cash has increased by an equivalent of debited amount from the sale and receipt of dividend while investment decreased by an equivalent of credited amount. Dividend income is a cash receipt attributed to Investment sold.

Debit Equity in Earnings

Credit Investment in Investee

• This journal entry means that equity account has reduced by an equivalent of debited amount while investment has also reduced by equivalent of credited amount. This is a sale of investment.

Debit Accounts Receivable

Credit Sales Revenue

• This journal entry means that accounts receivable has increased by an equivalent of debited amount while sales revenue has also increased by same amount. This is a record of credit sale of recording revenue whether cash is received or not.

What does it mean when you Debit a Revenue Account?

When you debit a revenue account, it means that revenue has decreased by an equivalent of debited amount. This can be due to returns or discounts.