Which account normally has a debit balance?

Which account normally has a debit balance?

• A. Accounts Payable
• B. Sales
• C. Accounts Receivable
• D. Owner's Capital

Answer: (C)

In double-entry accounting, accounts have normal balances based on their type. Assets and expenses normally carry debit balances, while liabilities, equity, and revenue normally carry credit balances. Accounts Receivable is an asset, representing money owed by customers, so it naturally has a debit balance. Debits increase Accounts Receivable, credits decrease it, which aligns with how sales on credit increase what customers owe. For example, when you make a sale on credit, you debit Accounts Receivable and credit Sales Revenue. By contrast, Accounts Payable is a liability (credit balance), Sales is revenue (credit balance), and Owner’s Capital is equity (credit balance). So Accounts Receivable is the account that normally sits with a debit balance.

In double-entry accounting, accounts have normal balances based on their type. Assets and expenses normally carry debit balances, while liabilities, equity, and revenue normally carry credit balances. Accounts Receivable is an asset, representing money owed by customers, so it naturally has a debit balance. Debits increase Accounts Receivable, credits decrease it, which aligns with how sales on credit increase what customers owe. For example, when you make a sale on credit, you debit Accounts Receivable and credit Sales Revenue. By contrast, Accounts Payable is a liability (credit balance), Sales is revenue (credit balance), and Owner’s Capital is equity (credit balance). So Accounts Receivable is the account that normally sits with a debit balance.