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College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

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BuyFindarrow_forward

College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

What is the normal balance for each of the following accounts: (a) Purchases? (b) Sales Discounts? (c) Purchases Returns and Allowances? (d) Sales? (e) Purchases Discounts? (f) Sales Returns and Allowances?

To determine

List the normal balance for given accounts.

Explanation

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

  • Debit, all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.
  • Credit, all increase in liabilities, revenues, and stockholders’ equities, all decrease in assets, expenses.

Normal balance: Normal balance of an account refers to the heavier side of the account vis-à-vis the other side, either debit or credit. Normal balance is also known as usual balance of an account and depends on the kinds of different account, like the assets account have normal debit balance, liabilities and stockholders’ equity account have normal credit balance.

ParticularsDebit/Credit
  1. (a) Purchases
Debit
  1. (b) Sales Discount
Debit
  1. (c) Purchase Returns and Allowances
Credit
  1. (d) Sales
Credit
  1. (e) Purchase Discount
Credit
  1. (f) Sales Return and Allowance
Debit

Table (1)

(a) Purchases: As per the rule of debit and credit, the debit increases the value of expenses and credit decreases the value of expense...

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