Multiple Choice
In a double-entry accounting system, which of the following accounts has a normal debit balance?
2. Transaction Analysis
Journal Entries: Debits and Credits
Multiple Choice
In a standard double-entry accounting system, what is the normal balance of Accounts Payable?
A
No normal balance because it is a temporary account
B
Either debit or credit, depending on the accounting method used
C
Debit
D
Credit
Verified step by step guidance1
Understand that in double-entry accounting, every account has a normal balance, which is the side (debit or credit) that increases the account.
Recall that Accounts Payable is a liability account representing amounts a company owes to suppliers or creditors.
Know that liability accounts normally have a credit balance because liabilities increase with credits and decrease with debits.
Recognize that temporary accounts are typically revenue, expense, or dividend accounts, not liability accounts like Accounts Payable.
Conclude that the normal balance of Accounts Payable is a credit balance, meaning increases are recorded as credits and decreases as debits.
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