Revenue Accounts Will Normally Have Which Balance

Capital is an owner s equity account and normally has a credit balance.

Revenue accounts will normally have which balance. Assets expenses losses and the owner s drawing account will normally have debit balances their balances will increase with a debit entry and will decrease with a credit entry. The excess amount of debit side over the credit side is shown as the normal debit balance the excess amount of credit side over the debit side is shown as the normal credit balance. The revenue account is an equity account with a credit balance. The normal balance of a revenue account is a credit.

Both a and b are correct. In a t account their balances will be on the right side. Assets liabilities owners s capital owner s drawing revenues expenses. Revenues and gains are recorded in accounts such as sales service revenues interest revenues or interest income and gain on sale of assets.

The expanded basic. As shown in the expanded accounting equation revenues increase equity. Liabilities owners equity and revenue accounts all have normal debit balances c. The expanded basic equation is.

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. We can now solve the problem. Accounts that normally have a credit cr balance are liabilities revenues and equity. In contrast accounts that normally have a debit balance include the asset loss contra liability owner s drawing dividend and expense accounts.

The normal balance of an expense account is a debit. Normal balance refers to the excess of amount on one side over the amount on the other side of an account. Service revenue is a revenue account and normally has a credit. The accounts that have a normal credit balance include contra asset liability gain revenue owner s equity and stockholders equity accounts.

This means that a credit in the revenue t account increases the account balance. Accounts that normally have a debit dr balance are assets expenses and drawing. A normal balance is the expectation that a particular type of account will have either a debit or a credit balance based on its classification within the chart of accounts it is possible for an account expected to have a normal balance as a debit to actually have a credit balance and vice versa but these situations should be in the minority. Revenues and gains are usually credited.

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. Half of all the accounts have a normal credit balance b. Unlike other accounts revenue accounts are rarely debited because revenues or income are usually only generated. These accounts normally have credit balances that are increased with a credit entry.

Liabilities revenues and sales gains and owner equity and stockholders equity accounts normally have credit balances these accounts will see their balances increase. Revenue accounts normally have debit balances.