Which Sales Accounts Normally Have a Debit Balance

question 65

Multiple Choice

Which sales accounts normally have a debit balance?

• A) Sales Discounts
• B) Sales Returns and Allowances.
• C) Both Sales Discounts and Sales Returns and Allowances have debit balances.
• D) Neither Sales Discounts or Sales Returns and Allowances have debit balances.

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Definitions:

Interest

The cost of borrowing money, usually expressed as a percentage of the principal, paid by the borrower for the use of borrowed funds.

Rate of Return

The positive or negative change in an investment's worth within a specific period, shown as a percent of the cost of the investment.

Investment Account

A financial account held at a financial institution that holds investments such as stocks, bonds, mutual funds, and other assets for the investor.

Compounding Effect

The method by which an investment's worth grows over time as the returns it generates, including both capital gains and interest, themselves accumulate interest.