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

2. Transaction Analysis

Journal Entries: Debits and Credits

Financial Accounting

2. Transaction Analysis

Journal Entries: Debits and Credits

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Multiple Choice

Which of the following accounts normally have credit balances?

Liabilities

Expenses

Revenue

Assets

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Verified step by step guidance

Understand the concept of normal account balances: In accounting, accounts are classified into categories, and each category has a normal balance type (either debit or credit). This is based on the accounting equation: Assets = Liabilities + Equity.

Identify the accounts listed in the problem: The accounts mentioned are Liabilities, Expenses, Revenue, and Assets. Each of these falls into a specific category in the accounting framework.

Determine the normal balance for each account type: Liabilities and Revenue accounts typically have credit balances because they increase equity or represent obligations. Assets and Expenses typically have debit balances because they represent resources or costs incurred.

Match the accounts with their normal balance type: From the problem, Liabilities and Revenue are correctly identified as accounts with normal credit balances. Expenses and Assets are incorrectly listed as having credit balances; they normally have debit balances.

Conclude the correct answer: The accounts that normally have credit balances are Liabilities and Revenue. This aligns with the accounting principles and the classification of accounts.