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:

Accrued Liabilities

Liabilities that have been incurred but not yet paid or recorded in the financial statements.

Cash Flows

The movement of money into and out of a business, reflecting the company's operational, investing, and financing activities.

Net Worth

The total assets minus total liabilities of an individual or company, representing the owner's equity.

Financing Activities

Transactions related to funding the company, including issuing equity, borrowing loans, or paying dividends.