Multiple Choice
In double-entry accounting, a credit is NOT the normal balance for which of the following accounts?
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2. Transaction Analysis
Journal Entries: Debits and Credits
Multiple Choice
Which of the following accounts increases with a debit under the normal debit/credit rules?
A
Accounts Receivable (asset)
B
Accounts Payable (liability)
C
Common Stock (equity)
D
Service Revenue (revenue)
Verified step by step guidance1
Understand the normal balance rules for different types of accounts: Assets and expenses normally have a debit balance, while liabilities, equity, and revenue accounts normally have a credit balance.
Recall that an increase in an account is recorded on the side of its normal balance. For asset accounts, which normally have debit balances, increases are recorded as debits.
Analyze each option: Accounts Receivable is an asset account, so it increases with a debit; Accounts Payable is a liability account, so it increases with a credit; Common Stock is an equity account, so it increases with a credit; Service Revenue is a revenue account, so it increases with a credit.
Conclude that among the given options, only Accounts Receivable increases with a debit under the normal debit/credit rules.
Summarize that understanding the normal balance of accounts helps determine whether an increase is recorded as a debit or credit.
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