What group of accounts normally has a credit balance?
The accounts on right side of this equation have a normal balance of credit. The normal balance of all other accounts are derived from their relationship with these three accounts. Normal balance of common accounts: Asset: Debit; Liability: Credit; Owner's Equity: Credit; Revenue: Credit; Expense: Debit; Retained Earnings: Credit; Dividend: Debit
For a particular account one of these will be the normal balance type and will be reported as a positive number while a negative balance will indicate an abnormal situation as when a bank account is overdrawn. Debit balances are normal for asset and expense accounts and credit balances are normal for liability equity and revenue accounts .
Why will some asset accounts have a credit balance ...
Debit balance — AccountingTools
Whether one uses a debit or credit to increase or decrease an account depends on the normal balance of the account . Assets Expenses and Drawings accounts (on the left side of the equation) have a normal balance of debit. Liability Revenue and Capital accounts (on the right side of the equation) have a normal balance of credit .
Wed Feb 11 2004 13:30:00 GMT-0500 (Eastern Standard Time) · Asset expense and dividend accounts have normal debit balances (i.e. debiting these types of accounts increases them). Liability revenue and equity accounts have normal credit balances (i.e. crediting these types of accounts increases them). 0 = Dr Assets Cr Owners' Equity Cr Liabilities
In its simplest form this is a three-column list. Column One contains the names of those accounts in...
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