Revenue Accounts Will Normally Have

Assets expenses and dividends 109.

Revenue accounts will normally have. Normal balance refers to the excess of amount on one side over the amount on the other side of an account. In recording an accounting transaction in a double entry system the amount of the debits must equal the amount of the credits. Hence contra revenue accounts will have debit balances. Let s illustrate revenue accounts by assuming your company performed a service and was immediately paid the full amount of 50 for the service.

Unlike other accounts revenue accounts are rarely debited because revenues or income are usually only generated. This means that a credit in the revenue t account increases the account balance. As shown in the expanded accounting equation revenues increase equity. Accounts with balances that are the opposite of the normal balance are called contra accounts.

From the table above it can be seen that assets expenses and dividends normally have a debit balance whereas liabilities capital and revenue normally have a credit balance. By identifying the type of account asset liability etc and establishing which side of the accounting equation it is on left or right it is possible to determine. Identify whether the given statement is true or false. Which accounts normally have debit balances.

The usual sequence of steps in the transaction recording process is analyze journalize post to the ledger.