Posts Tagged ‘Normal Balance’
Normal Balance: Expense
The normal balance of an Expense Account is a Debit. So, if you purchased $450 worth of office supplies, it means you have a $450 Debit in the Office Supplies account.
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Normal Balance: Revenue
The normal balance of a Revenue Account is a Credit. So, if you earned $750 from selling widgets (Sales), it means you have a $750 Credit in the Sales account.
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Normal Balance: Owners’ Equity
Like Liability Accounts, the normal balance of an Owners’ Equity Account is a Credit. So, if you have $250 in Retained Earnings, it means you have a $250 Credit in the Retained Earnings account.
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Normal Balance: Liabilities
The normal balance of a Liability Account is a Credit. So, if you owed $750 to someone in the form of a Notes Payable, it means you have a $750 Credit in the Notes Payable account.
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Normal Balance: Asset
The normal balance of an Asset Account is a Debit. So, if you had $1,000 in a bank account, it means you have a $1,000 Debit in the bank account.
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