Which of the Following Correctly Identifies Normal Balances of Accounts

question 222

Multiple Choice

Which of the following correctly identifies normal balances of accounts?

• A)\(\begin{array}{ll}
• \text { Assets } & \text { Debit } \\
• \text { Liabilities } & \text { Credit } \\
• \text { Owner's Capital } & \text { Credit } \\
• \text { Revenues } & \text { Debit } \\
• \text { Expenses } & \text { Credit }
• \end{array}\)
• B)\(\begin{array}{ll}
• \text { Assets } & \text { Debit } \\
• \text { Liabilities } & \text { Credit } \\
• \text { Owner's Capital } & \text { Credit } \\
• \text { Revenues } & \text { Credit } \\
• \text { Expenses } & \text { Credit }
• \end{array}\)
• C)\(\begin{array}{ll}
• \text { Assets } & \text { Credit } \\
• \text { Liabilities } & \text { Debit } \\
• \text { Owner's Capital } & \text { Debit } \\
• \text { Revenues } & \text { Credit } \\
• \text { Expenses } & \text { Debit }
• \end{array}\)
• D)\(\begin{array}{ll}
• \text { Assets } & \text { Debit } \\
• \text { Liabilities } & \text { Credit } \\
• \text { Owner's Capital } & \text { Credit } \\
• \text { Revenues } & \text { Credit } \\
• \text { Expenses } & \text { Debit }
• \end{array}\)

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Definitions:

Paid-in Capital

The total amount of capital that a company has received from shareholders in exchange for shares of stock.

Retained Earnings

Profits that a company has earned to date, less any dividends or other distributions paid to shareholders.

Earnings Per Share

A financial ratio calculated by dividing a company's profit available to its common shareholders by the number of outstanding shares.

Outstanding Common Stock

Shares of a company that have been issued and are currently held by investors, excluding shares held by the company itself.