Normal balance
The normal balance of an account is on the side where an increase in the account is recorded. Debits to a specific asset account should exceed the credits to that account. Credit to a liability account should exceed debits to that account. Thus, asset accounts normally show debit balances, and liability accounts normally show credit balances.
Category: Accounting & Auditing
Previous: ← Double entry system
Next: The Journal →
More from this Section
- Ideal & Normal standards
Ideal standards represent optimum levels of performance under prefect operating conditions. Normal ... - Modified rebuy
Modified rebuy refers to a business buying situation in which the buyer wants to modify ... - Ratio
Ratio is an expression of the mathematical relationship between one quantity and another. ... - Aging the accounts receivable
Aging the accounts receivable refers to the analysis of customer balances by length of ... - Present value
The amount that must be invested today at a given rate of interest over a specified time ...