Which accounts have normal credit balances?

Which accounts have normal credit balances?

• A. Assets, Expenses, and Drawings
• B. Liabilities, Owner's Equity, and Revenues
• C. Cash, Accounts Receivable, and Equipment
• D. Salaries Expense, Interest Expense, and Utilities Expense

Answer: (B)

In double-entry accounting, each account has a normal balance—the side that increases the account. Assets, expenses, and drawings normally have debit balances, while liabilities, owner’s equity, and revenues normally have credit balances. So the accounts with normal credit balances are liabilities, owner’s equity, and revenues. Credits increase these accounts, while debits would decrease them. This is why option sets containing assets, expenses, or drawings (which carry debit normals) don’t fit. Credits on liabilities, equity, and revenues reflect increases in those areas (like incurring a liability, earning revenue, or increasing owner’s equity).

In double-entry accounting, each account has a normal balance—the side that increases the account. Assets, expenses, and drawings normally have debit balances, while liabilities, owner’s equity, and revenues normally have credit balances.

So the accounts with normal credit balances are liabilities, owner’s equity, and revenues. Credits increase these accounts, while debits would decrease them. This is why option sets containing assets, expenses, or drawings (which carry debit normals) don’t fit. Credits on liabilities, equity, and revenues reflect increases in those areas (like incurring a liability, earning revenue, or increasing owner’s equity).