# Normal balances of merchandise accounts What is the normal balance of the following accounts: (a) Cost of Merchandise Sold, (b) Customer Refunds Payable, (c) Delivery Expense, (d) Estimated Returns Inventory, (e) Merchandise Inventory, (f) Sales, (g) Sales Tax Payable.

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

### Accounting

27th Edition
WARREN + 5 others
Publisher: Cengage Learning,
ISBN: 9781337272094

#### Solutions

Chapter
Section
Chapter 6, Problem 6.18EX
Textbook Problem

## Normal balances of merchandise accountsWhat is the normal balance of the following accounts: (a) Cost of Merchandise Sold, (b) Customer Refunds Payable, (c) Delivery Expense, (d) Estimated Returns Inventory, (e) Merchandise Inventory, (f) Sales, (g) Sales Tax Payable.

Expert Solution
To determine

Sales is an activity of selling the merchandise inventory of a business.

To Describe: The normal balance of the following accounts.

### Explanation of Solution

(a)

Cost of Merchandise Sold – Debit

Explanation:

Cost of merchandise sold is an expense account and it decreases the value of equity. Therefore, cost of merchandise sold account is debited and shows a debit balance.

(b)

Customers Refunds Payable – Credit

Explanation:

Customer refunds payable is a liability account. Therefore, customer refunds payable account is credited and shows a credit balance.

(c)

Delivery Expense – Debit

Explanation:

Delivery expense account is an expense account and it decreases the value of equity. Therefore, delivery expense account is debited and shows a debit balance.

(d)

Estimated Returns Inventory – Debit

Explanation:

Estimated returns inventory account is an expense account and it decreases the value of equity...

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