An Awareness of the Normal Balances of Accounts Would Help

question 42

Multiple Choice

An awareness of the normal balances of accounts would help you spot which of the following as an error in recording?

• A) A debit balance in an asset account
• B) A credit balance in an expense account
• C) A credit balance in a liabilities account
• D) A credit balance in a revenue account

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Definitions:

Orange Juice

A liquid extract of the orange tree fruit, consumed as a beverage or used in culinary dishes and as a commodity traded on futures markets.

Futures Contracts

Standardized legal agreements to buy or sell a financial instrument or physical commodity at a predetermined future date and price.

Profit (Loss)

The financial gain or loss resulting from revenue generated minus the expenses of operating the business.

Ounce

A unit of weight commonly used in the United States and the United Kingdom, equal to 1/16 of a pound or approximately 28.35 grams.