Multiple Choice
Which of the following lists the correct three steps for correcting an incorrect amount posted to an account?
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2. Transaction Analysis
Journal Entries: Debits and Credits
Multiple Choice
Which of the following accounts normally has a debit balance?
A
Cash
B
Service Revenue
C
Accounts Payable
D
Common Stock
Verified step by step guidance1
Understand the concept of normal account balances: In accounting, accounts are classified into assets, liabilities, equity, revenues, and expenses. Each type of account has a normal balance, which is either a debit or credit. Assets and expenses typically have debit balances, while liabilities, equity, and revenues usually have credit balances.
Analyze the account 'Cash': Cash is an asset account. Since assets normally have a debit balance, Cash would typically have a debit balance.
Analyze the account 'Service Revenue': Service Revenue is a revenue account. Revenue accounts normally have a credit balance, so Service Revenue does not have a debit balance.
Analyze the account 'Accounts Payable': Accounts Payable is a liability account. Liability accounts normally have a credit balance, so Accounts Payable does not have a debit balance.
Analyze the account 'Common Stock': Common Stock is an equity account. Equity accounts normally have a credit balance, so Common Stock does not have a debit balance.
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