Which set of accounts below would have a normal debit balance?

General
1

which set of accounts below would have a normal debit balance?

2

Which set of accounts below would have a normal debit balance?

Answer:

In accounting, accounts that typically have a normal debit balance are those that increase the value when debited. These accounts include:

  1. Assets:

    • Assets are resources owned by a business. Common asset accounts with a normal debit balance include:
      • Cash
      • Accounts Receivable
      • Inventory
      • Prepaid Expenses
      • Equipment

  2. Expenses:

    • Expenses represent the costs incurred by a business. They decrease owner’s equity and typically have a normal debit balance. Common examples include:
      • Rent Expense
      • Wages Expense
      • Utility Expense
      • Insurance Expense

  3. Losses:

    • Losses also usually have a debit balance. These include accounts like:
      • Loss on Sale of Assets

Understanding which accounts carry a normal debit balance is crucial for making accurate journal entries and maintaining balanced books.