Which Of The Following Accounts Has A Normal Credit Balance? (Select All That Apply.)

The correct choices for this multiple choice question (mcq) are c, f and k, as all of these accounts are increased on credit side or right side of their T-Accounts. These have credit balances normally which are positive or favorable balances for these Kinds of Accounts. Sales Revenue is a direct source of revenue for a business. When the business sold goods for cash to customers, the sales revenue account is increased, so we credit it. Owner’s Capital is increasing on the right side of its T-Account when the sole proprietor made initial investments for the business or make additional investments into the business during the accounting period. Accounts Payable or Sundry Creditor, which is a Current Liability, is also increasing on right side of their T-Account. When the business incurred a liability, we credit it as it is increasing. So, a liability account has a favorable or normal credit balance.

All other options of this mcq are incorrect here. Sales Returns and Allowances and Sales Discount are Contra Revenue Accounts which increase on debit side. Cost of Goods Sold  is a direct expense and it is also increasing on debit side. It is recorded in Income Statement for the period. Accounts Receivable or Sundry Debtors, Copyrights (Intangible Assets) and Inventory accounts are assets (recorded on the balance sheet) and have normal debit balances as these increase on debit side. Supplies expense and Delivery expense are increasing on debit side in their T-Accounts, so these have normal debit balances by default.

So, we can say that all the revenues, liabilities and equity accounts have normal credit balances and as a result these are increased on credit side while all the assets and expenses have normal debit balances as a result these increase on debit in their T-Accounts according to the Rules of Debit and Credit.