Multiple Choice
Which of the following best describes the structure of a trial balance worksheet?
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2. Transaction Analysis
Trial Balance
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Which of the following accounts would normally have a credit balance on the trial balance?
A
Equipment
B
Cash
C
Accounts Payable
D
Prepaid Expenses
Verified step by step guidance1
Understand the nature of the accounts listed: Equipment, Cash, Accounts Payable, and Prepaid Expenses. Determine whether each account is an asset, liability, or equity account.
Recall the normal balance rules: Asset accounts (e.g., Equipment, Cash, Prepaid Expenses) normally have a debit balance, while liability accounts (e.g., Accounts Payable) and equity accounts typically have a credit balance.
Analyze each account: Equipment, Cash, and Prepaid Expenses are asset accounts, so they normally have debit balances. Accounts Payable is a liability account, so it normally has a credit balance.
Review the trial balance: A trial balance lists all accounts and their balances, ensuring that total debits equal total credits. Accounts with normal credit balances (e.g., liabilities and equity) will appear on the credit side of the trial balance.
Conclude that the account with a normal credit balance on the trial balance is Accounts Payable, as it is a liability account.
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