![]() So for example there are contra expense accounts such as purchase returns, contra revenue accounts such as sales returns and contra asset accounts such as accumulated depreciation. Losses on the sale of fixed assets: A loss on the sale of fixed assets is on the left side of the accounting equation and is normally a debit balance.Ī contra account is one which is offset against another account.Gains on the sale of fixed assets: A gain on the sale of fixed assets is on the right side of the accounting equation and is normally a credit balance.Retained earnings normal balance: Retained earnings is part of the equity of the business on the right side of of the accounting equation and is normally a credit balance.Inventory normal balance: Inventory is an asset on the left side of the accounting equation and is normally a debit balance.Dividends normal balance: A dividend is on the left side of the accounting equation and is normally a debit balance.Cost of goods sold normal balance: Cost of goods sold is an expense on the left side of the accounting equation and is normally a debit balance. ![]() Common stock normal balance: Common stock is part of capital on the right side of the accounting equation and is normally a credit balance.Cash normal balance: Cash is an asset on the left side of the accounting equation and is normally a debit balance.Accounts receivable normal balance: Accounts receivable is an asset on the left side of the accounting equation and is normally a debit balance.Accounts payable normal balance: Accounts payable is a liability on the right side of the accounting equation and is normally a credit balance.To understand the concept of the normal balance consider the following examples in relation to the table above.
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