Question: 1. Suzanne knows that an increase to an expense reduces retained earnings (a stockholders' equity account). However, she also knows that expense accounts have a debit balance, while retained earnings normally has a credit balance. Are these two pieces of information consistent? Explain.
2. What is a journal? What is a journal entry?
3. Provide the proper format for recording a transaction.
4. Explain the phrase "debits equal credits."