Accounting - Study Mode

[#2466] The normal balance of liability account is
Correct Answer

(A) Credit balance

Explanation

Solution: The normal balance of liability account is Credit balance. Normal balance is the side where the balance of the account is normally found. Asset accounts normally have debit balances, while liabilities and capital normally have credit balances. Income has a normal credit balance since it increases capital .

[#2467] Which of the following statements is incorrect regarding capital account?
Correct Answer

(A) Debit increases the capital account balance

Explanation

Solution: Debit increases the capital account balance statements is incorrect regarding capital account. It decreases the capital account balance.

[#2468] Which of the following is the normal balance of a rent expense account?
Correct Answer

(D) Debit balance

Explanation

Solution: Debit balance is the normal balance of a rent expense account. Asset accounts normally have debit balances.

[#2469] Revenue and expense accounts are referred to as
Correct Answer

(A) Nominal accounts

Explanation

Solution: Revenue and expense accounts are referred to as Nominal accounts because each period they are closed out to Income Summary in the closing process.

[#2470] Office equipment's account is classified as
Correct Answer

(B) Real account

Explanation

Solution: Office equipment's account is classified as Real account.