8RQ - Horngren'S Financial And Managerial Accounting

Question

Identify which types of accounts have a normal debit balance and which types of accounts have a normal credit balance.

Step-by-Step Solution

Answer

Assets, expenses, and dividends have a normal debit balance, and liabilities, common stock, and revenues have a credit normal balance.

Accounts with a normal debit balance

The accounts which have the normal debit balance are assets as assets are increased with the debit, expenses, and dividends are the equity accounts that also have a debit balance.

Accounts with a normal credit balance

The accounts which have a normal credit balance are liabilities because the liabilities increase when credited, other than common stock and revenues have the normal credit balance.