The Normal Balance of an Account

question 72

Multiple Choice

The normal balance of an account:

• A) falls on the side where increases are recorded.
• B) is computed in the journal.
• C) must be computed after every transaction.
• D) cannot be computed in a non-computerized accounting system.

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Definitions:

Sales Puffery

Exaggerated or boastful statements about a product or service that are not meant to be taken literally and are thus not legally binding promises or warranties.

Justifiably Relied

A principle where a party's action or decision is based on another's representations or promises, perceived as reasonable.

Representation

The act of standing in for or acting on behalf of others, or the presentation of information in a particular manner.

Detrimental Reliance

A legal term describing a situation where an individual suffers harm by relying on a promise or representation made by another.