{"id":187158,"date":"2025-02-01T09:11:26","date_gmt":"2025-02-01T09:11:26","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=187158"},"modified":"2025-02-01T09:11:28","modified_gmt":"2025-02-01T09:11:28","slug":"which-of-the-following-accounts-has-a-normal-debit-balance","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/02\/01\/which-of-the-following-accounts-has-a-normal-debit-balance\/","title":{"rendered":"Which of the following accounts has a normal debit balance"},"content":{"rendered":"\n

Which of the following accounts has a normal debit balance?<\/p>\n\n\n\n

a. Sales<\/p>\n\n\n\n

b. Interest Revenue<\/p>\n\n\n\n

c. Merchandise Inventory<\/p>\n\n\n\n

d. Accounts Payable<\/p>\n\n\n\n

The Correct Answer and Explanation is :<\/strong><\/mark><\/p>\n\n\n\n

Correct Answer:<\/h3>\n\n\n\n

c. Merchandise Inventory<\/strong><\/p>\n\n\n\n

Explanation:<\/h3>\n\n\n\n

In accounting, accounts are classified into five main categories: Assets, Liabilities, Equity, Revenues, and Expenses<\/strong>. Each type of account has a “normal balance,” which refers to the side (debit or credit) that increases its value.<\/p>\n\n\n\n

Understanding Normal Balances:<\/h4>\n\n\n\n
    \n
  • Assets<\/strong> (e.g., Cash, Accounts Receivable, Merchandise Inventory) \u2192 Normal Debit Balance<\/strong><\/li>\n\n\n\n
  • Liabilities<\/strong> (e.g., Accounts Payable, Notes Payable) \u2192 Normal Credit Balance<\/strong><\/li>\n\n\n\n
  • Equity<\/strong> (e.g., Common Stock, Retained Earnings) \u2192 Normal Credit Balance<\/strong><\/li>\n\n\n\n
  • Revenues<\/strong> (e.g., Sales, Interest Revenue) \u2192 Normal Credit Balance<\/strong><\/li>\n\n\n\n
  • Expenses<\/strong> (e.g., Cost of Goods Sold, Rent Expense) \u2192 Normal Debit Balance<\/strong><\/li>\n<\/ul>\n\n\n\n

    Now, let\u2019s analyze each option:<\/p>\n\n\n\n

      \n
    1. Sales (a.)<\/strong><\/li>\n<\/ol>\n\n\n\n
        \n
      • Sales is a revenue account. Since revenue increases equity, it has a normal credit<\/strong> balance.<\/li>\n\n\n\n
      • Incorrect Answer<\/strong><\/li>\n<\/ul>\n\n\n\n
          \n
        1. Interest Revenue (b.)<\/strong><\/li>\n<\/ol>\n\n\n\n
            \n
          • Interest revenue, like sales, is a revenue account, meaning it also has a normal credit<\/strong> balance.<\/li>\n\n\n\n
          • Incorrect Answer<\/strong><\/li>\n<\/ul>\n\n\n\n
              \n
            1. Merchandise Inventory (c.)<\/strong><\/li>\n<\/ol>\n\n\n\n
                \n
              • Merchandise Inventory is an asset<\/strong> account because it represents goods a company owns and plans to sell.<\/li>\n\n\n\n
              • Asset accounts normally have debit balances<\/strong>, as they increase with debits and decrease with credits.<\/li>\n\n\n\n
              • Correct Answer<\/strong><\/li>\n<\/ul>\n\n\n\n
                  \n
                1. Accounts Payable (d.)<\/strong><\/li>\n<\/ol>\n\n\n\n
                    \n
                  • Accounts Payable is a liability<\/strong> account, representing money owed to suppliers.<\/li>\n\n\n\n
                  • Liability accounts have a normal credit balance<\/strong>, as they increase with credits and decrease with debits.<\/li>\n\n\n\n
                  • Incorrect Answer<\/strong><\/li>\n<\/ul>\n\n\n\n

                    Thus, the only account that has a normal debit balance<\/strong> is Merchandise Inventory<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

                    Which of the following accounts has a normal debit balance? a. Sales b. Interest Revenue c. Merchandise Inventory d. Accounts Payable The Correct Answer and Explanation is : Correct Answer: c. Merchandise Inventory Explanation: In accounting, accounts are classified into five main categories: Assets, Liabilities, Equity, Revenues, and Expenses. Each type of account has a […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-187158","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/187158","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=187158"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/187158\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=187158"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=187158"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=187158"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}