Which of the following accounts has a normal debit balance?

Which of the following accounts has a normal debit balance?

A. Revenue.

B. Notes Payable.

C. Cash.

D. Accounts Payable.

Answer: C. Cash.

Cash is one of the asset accounts that has a normal debit balance in the double entry accounting system. This means that when cash is received, the Cash account is debited (increased), and when cash is paid out, the Cash account is credited (decreased).

The normal debit balance for the Cash account stems from the general accounting principle that asserts that asset accounts are recorded on the left side of the balance sheet. This is because cash is one of the current assets and therefore follows this convention.

Other options:

A. Revenue: Revenue accounts have a normal credit balance as the sum of owners’ equity is increased by the revenue.

B. Notes Payable: Notes Payable is the account that represents the company’s obligation to a creditor and, therefore, it always has a credit balance.

D. Accounts Payable: Accounts Payable is also an account that holds a normal credit balance; this account represents the amount owed to the creditors.

The normal debit balance for Cash shows the increase and decrease of this important asset, thus facilitating the accurate recording and monitoring of a company’s cash in and out in the accounting system.