Multiple Choice
The savings in your savings account would fall under which of the following types of accounting?
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1. Introduction to Accounting
Types of Accounting
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Which of the following best describes the classification and normal balance of the Fees Earned account?
A
Liability account with a credit normal balance
B
Expense account with a debit normal balance
C
Revenue account with a credit normal balance
D
Asset account with a debit normal balance
Verified step by step guidance1
Understand the nature of the Fees Earned account: Fees Earned represents revenue generated by a business for providing services or selling goods. Revenue accounts track income earned during a specific period.
Recall the classification of revenue accounts: Revenue accounts are classified as part of the equity section in the accounting equation, as they increase the owner's equity.
Determine the normal balance of revenue accounts: Revenue accounts typically have a credit normal balance because they increase equity, which is on the credit side of the accounting equation.
Compare the options provided: Evaluate each option based on the classification and normal balance of the Fees Earned account. Eliminate options that do not align with the characteristics of revenue accounts.
Select the correct answer: Based on the analysis, the Fees Earned account is classified as a Revenue account with a credit normal balance.
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