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:

Contractual Liability

Legal obligations arising from contracts entered into by an entity or individual.

Warranty Liability

The legal obligation of a seller to ensure the goods or services sold meet certain quality and performance standards.

Dishonor

The refusal or inability to pay a bill of exchange or fulfill a financial obligation when due.

Presentment

The formal presentation of a financial instrument, such as a check, for payment.