### Understanding Normal Balances of AccountsIn accounting, understanding the concept of normal balances is essential as it pertains to the increases and decreases in specific types of accounts. Below is a multiple-choice question designed to test your knowledge on this topic.#### Question:Which of the following is true regarding normal balances of accounts?- **a.** All accounts have a normal debit balance.- **b.** The normal balance is on the increase side of the account.- **c.** The normal balance of all accounts will have either a positive or negative balance.- **d.** Accounts that have a normal debit balance will only have debit entries, never credit entries.#### Correct Answer:To comprehend this question, recall that:- **Assets, Expenses, and Dividends** normally have debit balances.- **Liabilities, Revenues, and Equity** normally have credit balances.The normal balance of an account indicates how that account is increased; hence the correct answer is:**b. The normal balance is on the increase side of the account.**Understanding this principle is crucial for accurate bookkeeping and financial reporting.### Diagram DescriptionThe image contains a screenshot of an online educational platform page displaying the above question with multiple-choice options. The visual layout includes typical elements such as navigation tabs and a text area where the question and options are presented. This structure is designed to facilitate online learning and assessment.For further study, practice distinguishing between various account types and their respective normal balances through exercises and examples provided in your learning modules.

Which of the following is true regarding normal balances of accounts? Oa. All accounts have a normal debit balance. Ob. The normal balance is on the increase side of the account. Oc. The normal balance of all accounts will have either a positive or negative balance. Od. Accounts that have a normal debit balance will only have debit entries, never credit entries.

Which of the following is true regarding normal balances of accounts? Oa. All accounts have a normal debit balance. Ob. The normal balance is on the increase side of the account. Oc. The normal balance of all accounts will have either a positive or negative balance. Od. Accounts that have a normal debit balance will only have debit entries, never credit entries.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Bookkeeping

Bookkeeping is the process of recording the financial transactions of a company on a regular basis. With the process of bookkeeping, companies can track important financial information that helps management in making crucial decisions.

Question

### Understanding Normal Balances of Accounts

In accounting, understanding the concept of normal balances is essential as it pertains to the increases and decreases in specific types of accounts. Below is a multiple-choice question designed to test your knowledge on this topic.

#### Question:
Which of the following is true regarding normal balances of accounts?

- **a.** All accounts have a normal debit balance.
- **b.** The normal balance is on the increase side of the account.
- **c.** The normal balance of all accounts will have either a positive or negative balance.
- **d.** Accounts that have a normal debit balance will only have debit entries, never credit entries.

#### Correct Answer:
To comprehend this question, recall that:
- **Assets, Expenses, and Dividends** normally have debit balances.
- **Liabilities, Revenues, and Equity** normally have credit balances.

The normal balance of an account indicates how that account is increased; hence the correct answer is:

**b. The normal balance is on the increase side of the account.**

Understanding this principle is crucial for accurate bookkeeping and financial reporting.

### Diagram Description
The image contains a screenshot of an online educational platform page displaying the above question with multiple-choice options. The visual layout includes typical elements such as navigation tabs and a text area where the question and options are presented. This structure is designed to facilitate online learning and assessment.

For further study, practice distinguishing between various account types and their respective normal balances through exercises and examples provided in your learning modules.

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