Service Revenue Normal Balance

Which of the following describes the classification and normal balance of the income from service account.

Service revenue normal balance. Let s illustrate revenue accounts by assuming your company performed a service and was immediately paid the full amount of 50 for the service. Nevertheless the amount of the credit was 900 too little. Unearned revenue is a liability and is included on the credit side of the balance sheet. 3 years ago.

Unearned revenues are recognized when customers pay up front for the products services. You ve got to learn it to do decently. The normal balance of any account is the balance debit or credit which you would expect the account have and is governed by the accounting equation. This is the key to accounting and bookkeeping.

The trial balance will not balance. Hence contra revenue accounts will have debit balances. The credit should have been to accounts receivable not to service revenue. Services revenue is also a revenue and like all revenue accounts which have credit balance as normal balance services revenue also has a credit balance.

Revenue credit c asset credit d. 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. Each of the accounts in a trial balance extracted from the bookkeeping ledgers will either show a debit or a credit balance. Therefore income accounts have a normal credit balance.

Accounts with balances that are the opposite of the normal balance are called contra accounts. What is the normal balance for the service revenue account. Comment related user ask. Quickly memorize the terms phrases and much more.

In summary service revenue will be overstated by 100 since service revenue normally has a credit balance making the credit balance larger.