Question

Several accounts are listed below:

a.	Purchases Returns and Allowances
b.	Sales Discounts
c.	Wages Expense
d.	Allowance for Doubtful Accounts
e.	Unearned Rent
f.	Income Taxes Payable
g.	Dividends
h.	Interest Revenue
i.	Discount on Bonds Payable
j.	Common Stock
k.	Additional Paid in Capital-Common Stock
l.	Inventory

Required:

List the accounts above that would normally have a credit balance.

Answer 1

• Following nature of account have CREDIT balance:
  Revenue accounts
  Equity accounts
  Liabilities account
  Contra Asset accounts
• Requirement

a.	Purchases Returns and Allowances	Credit balance
d.	Allowance for Doubtful Accounts	Credit balance	Contra Asset
e.	Unearned Rent	Credit balance	Liability account
f.	Income Taxes Payable	Credit balance	Liability account
h.	Interest Revenue	Credit balance	Revenue account
j.	Common Stock	Credit balance	Equity
k.	Additional Paid in Capital-Common Stock	Credit balance	Equity
b.	Sales Discounts	Debit balance	Contra Revenue
c.	Wages Expense	Debit balance	Expense account
g.	Dividends	Debit balance	Contra Equity
i.	Discount on Bonds Payable	Debit balance	Contra Liability
l.	Inventory	Debit balance	Asset account