What is the normal balance for assets, liabilities, revenues, and expenses?

What is the normal balance for assets, liabilities, revenues, and expenses?

• A. Debit, Credit, Credit, Credit
• B. Credit, Debit, Debit, Debit
• C. Debit, Debit, Debit, Debit
• D. Credit, Credit, Debit, Debit

Answer: (A)

Normal balances show which side increases an account. For assets, increases are recorded on the debit side, so assets have a debit normal balance. For liabilities, increases are on the credit side, giving them a credit normal balance. Revenue accounts also increase equity, so they carry a credit normal balance. Expenses, on the other hand, reduce equity and increase with a debit, so they have a debit normal balance. Putting that together, the typical pattern is assets on the debit side, liabilities on the credit side, revenues on the credit side, and expenses on the debit side. Any deviation would clash with these established norms.

Normal balances show which side increases an account. For assets, increases are recorded on the debit side, so assets have a debit normal balance. For liabilities, increases are on the credit side, giving them a credit normal balance. Revenue accounts also increase equity, so they carry a credit normal balance. Expenses, on the other hand, reduce equity and increase with a debit, so they have a debit normal balance. Putting that together, the typical pattern is assets on the debit side, liabilities on the credit side, revenues on the credit side, and expenses on the debit side. Any deviation would clash with these established norms.