Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

1. Introduction to Accounting

Types of Accounting

Financial Accounting

1. Introduction to Accounting

Types of Accounting

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Multiple Choice

Which of the following accounts typically has a normal credit balance?

Service Revenue

Prepaid Insurance

Cash

Supplies Expense

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Verified step by step guidance

Understand the concept of normal balances: In accounting, accounts are classified as either having a normal debit balance or a normal credit balance. Assets, expenses, and dividends typically have normal debit balances, while liabilities, revenues, and equity accounts typically have normal credit balances.

Analyze each account type: Service Revenue is a revenue account, Prepaid Insurance is an asset account, Cash is an asset account, and Supplies Expense is an expense account.

Recall the normal balance rules: Revenue accounts, such as Service Revenue, have a normal credit balance because they increase equity. Asset accounts, such as Prepaid Insurance and Cash, have normal debit balances because they represent resources owned by the company. Expense accounts, such as Supplies Expense, have normal debit balances because they decrease equity.

Determine which account matches the normal credit balance rule: Based on the analysis, Service Revenue is the account that typically has a normal credit balance.

Conclude the reasoning: Service Revenue is the correct answer because it aligns with the normal credit balance rule for revenue accounts, while the other accounts (Prepaid Insurance, Cash, and Supplies Expense) have normal debit balances.