Multiple Choice
Which type of accounts generally has a normal debit balance under double-entry accounting?
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2. Transaction Analysis
Journal Entries: Debits and Credits
Multiple Choice
Which of the following accounts typically has a normal debit balance?
A
Common Stock
B
Service Revenue
C
Accounts Payable
D
Accounts Receivable
Verified step by step guidance1
Understand the concept of normal balances: In accounting, each type of account has a normal balance, which is the side (debit or credit) that increases the account's value.
Identify the normal balance for asset accounts: Assets typically have a normal debit balance because increases in assets are recorded on the debit side.
Review the nature of the given accounts: Common Stock is an equity account with a normal credit balance; Service Revenue is a revenue account with a normal credit balance; Accounts Payable is a liability account with a normal credit balance.
Recognize that Accounts Receivable is an asset account, and therefore it normally has a debit balance.
Conclude that among the options, Accounts Receivable is the account that typically has a normal debit balance.
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