The plus side of a T account represents the:
a. a normal balance of that account
b. double balance of that account.
c. trial balance of that account
d. footings balance of that account.
e standard balance of that account
The correct answer and explanation is :
Correct Answer:
a. A normal balance of that account.
Explanation:
A T-account is a fundamental tool used in accounting to visualize and record transactions in debits and credits. It is shaped like the letter “T,” where:
- The left side represents debits (Dr.)
- The right side represents credits (Cr.)
Each account has a normal balance, which is the side (debit or credit) that increases the account’s value. The plus side of a T-account corresponds to the normal balance side of that particular account.
Understanding Normal Balances:
Different types of accounts have different normal balances:
- Assets (e.g., Cash, Accounts Receivable, Equipment) → Normal balance = Debit
- Expenses (e.g., Rent Expense, Salaries Expense) → Normal balance = Debit
- Liabilities (e.g., Accounts Payable, Loans Payable) → Normal balance = Credit
- Equity (e.g., Common Stock, Retained Earnings) → Normal balance = Credit
- Revenue (e.g., Sales Revenue, Service Revenue) → Normal balance = Credit
For example, a Cash (Asset) account has a normal balance on the debit side, meaning an increase is recorded as a debit (left side). Conversely, a Liability account (e.g., Accounts Payable) has a normal balance on the credit side, meaning an increase is recorded as a credit (right side).
Since the plus side of a T-account represents the side where increases occur, it aligns with the normal balance of that account—making option (a) the correct answer.