Normal account balance — definition?
The side (debit or credit) that increases an account.
Expanded accounting equation — includes?
Assets = Liabilities + Common Stock + Retained Earnings.
Credit balance criteria — accounts?
Liabilities, equity, and revenues normally have credit balances.
Normal balance — definition?
Side that increases account amount.
Asset accounts — normal balance?
Debit.
Liability, equity — normal balance?
Credit.
Overdrawn bank balance — sign?
Credit balance in cash account.
Expanded accounting equation?
Assets = Liabilities + Equity + Retained Earnings.
Retained earnings — definition?
Accumulated net income minus dividends.
Debit increase — accounts?
Assets and expenses.
Test your knowledge with 9 questions on Fundamentals of Financial Accounting.
1. What does the term 'normal account balance' refer to in accounting?
2. What is the primary role of credit balance criteria in accounting?
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