713945-3-3ESB

AID: 1825 | 06/11/2015

Matching debit and credit terminology with account titles:

Normal balance:
Normal balance refers to the balance that an account normally has. The side (debit or
credit) in which it is recorded depends on the increase or decrease of an account. For
example, if an asset account increases, it is recorded on the debit side and if it decreases,
it is recorded on the credit side.
Revenue account:
Revenue account is increased on the credit side of the account and decreased on the debit
side of the account.
Normal balance of revenue is credit.
Expense account:
Expense account is increased on the debit side of the account and decreased on the credit
side of the account.
Normal balance of expense is debit.
Assets:
The term asset refers to the value of the item that is assessable in terms of money. It
should be owned by an individual businessman or business which is directly or indirectly
used for business activity. Assets are classified into tangible assets and intangible assets.
Normal balance of assets is debit.
Liabilities:
Any amount owned by the business individual or business organization for business
purposes are termed as liability. Liability can be broadly classified into accounts payable
and notes payable. The person to whom the organization owes the money is termed as
creditors.
Normal balance of liability is credit.
Matching debit and credit terminology with account titles:
Account
Normal Balance
Credit
a) Unearned revenue
Credit
b) Service revenue
Dividends
Debit
c)
Land
Debit
d)
Accounts
receivable
Debit
e)
Debit
f) Cash
Credit
g) Common stock
Debit
h) Prepaid rent
Debit
i) Supplies
Credit
j) Accounts payable
Credit
k) Interest Revenue
Debit
l) Rent Expense