{"id":210223,"date":"2025-04-30T06:52:23","date_gmt":"2025-04-30T06:52:23","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=210223"},"modified":"2025-04-30T06:52:25","modified_gmt":"2025-04-30T06:52:25","slug":"which-of-the-following-accounts-has-a-normal-credit-balance","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/04\/30\/which-of-the-following-accounts-has-a-normal-credit-balance\/","title":{"rendered":"Which of the following accounts has a normal credit balance"},"content":{"rendered":"\n<p>Which of the following accounts has a normal credit balance?<br>a. Merchandise Inventory<\/p>\n\n\n\n<p>b. Accounts Receivable<\/p>\n\n\n\n<p>c. Sales<\/p>\n\n\n\n<p>d. Delivery Expense<\/p>\n\n\n\n<p><mark style=\"background-color:rgba(0, 0, 0, 0)\" class=\"has-inline-color has-ast-global-color-6-color\"><strong>The correct answer and explanation is :<\/strong><\/mark><\/p>\n\n\n\n<p>The correct answer is: <strong>c. Sales<\/strong><\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">Explanation:<\/h3>\n\n\n\n<p>In accounting, each account has a <strong>normal balance<\/strong>, which is the side (debit or credit) where increases are recorded. Understanding this helps in determining how transactions affect each account.<\/p>\n\n\n\n<p>Let\u2019s briefly review the options provided:<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>a. Merchandise Inventory<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Type<\/strong>: Asset<\/li>\n\n\n\n<li><strong>Normal Balance<\/strong>: <strong>Debit<\/strong><\/li>\n\n\n\n<li><strong>Explanation<\/strong>: Merchandise Inventory represents goods a company holds for resale. As an asset, it increases with a <strong>debit<\/strong> and decreases with a credit.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>b. Accounts Receivable<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Type<\/strong>: Asset<\/li>\n\n\n\n<li><strong>Normal Balance<\/strong>: <strong>Debit<\/strong><\/li>\n\n\n\n<li><strong>Explanation<\/strong>: Accounts Receivable reflects amounts owed by customers. Since it\u2019s an asset, it also increases with a <strong>debit<\/strong>.<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>c. Sales<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Type<\/strong>: Revenue<\/li>\n\n\n\n<li><strong>Normal Balance<\/strong>: <strong>Credit<\/strong><\/li>\n\n\n\n<li><strong>Explanation<\/strong>: Sales revenue represents the income earned from selling goods or services. Revenue accounts have a <strong>normal credit balance<\/strong> because revenue increases owners\u2019 equity, which itself has a credit balance. Therefore, to record a sale, you <strong>credit<\/strong> the Sales account. For example, when a business makes a cash sale of $1,000, it debits Cash (asset increases) and credits Sales (revenue increases).<\/li>\n<\/ul>\n\n\n\n<h4 class=\"wp-block-heading\"><strong>d. Delivery Expense<\/strong><\/h4>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Type<\/strong>: Expense<\/li>\n\n\n\n<li><strong>Normal Balance<\/strong>: <strong>Debit<\/strong><\/li>\n\n\n\n<li><strong>Explanation<\/strong>: Delivery Expense is a cost incurred to deliver goods. As an expense, it reduces net income and thus owners\u2019 equity. All expenses have a <strong>normal debit balance<\/strong>.<\/li>\n<\/ul>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">Summary:<\/h3>\n\n\n\n<p>Only <strong>Sales<\/strong> (option c) has a <strong>normal credit balance<\/strong> among the options. All the others\u2014Merchandise Inventory, Accounts Receivable, and Delivery Expense\u2014are accounts that have <strong>normal debit balances<\/strong>. Understanding these balances is fundamental for accurate journal entries and financial reporting.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Which of the following accounts has a normal credit balance?a. Merchandise Inventory b. Accounts Receivable c. Sales d. Delivery Expense The correct answer and explanation is : The correct answer is: c. Sales Explanation: In accounting, each account has a normal balance, which is the side (debit or credit) where increases are recorded. Understanding this [&hellip;]<\/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-210223","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/210223","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=210223"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/210223\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=210223"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=210223"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=210223"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}