Question

Which set of accounts has the same type of normal balance? A. Cash, accounts payable B. Prepaid rent, unearned service revenue C. Dividends, common stock D. Accounts payable, retained earnings

Name: Problem 36, Chapter 3: Principles of Accounting Volume 1: Financial Accounting
Uploaded: 2020-04-20T04:15:31-08:00
Duration: 4 min 2 s
Channel: Puneet Prajapati
Description: Which set of accounts has the same type of normal balance? A. Cash, accounts payable B. Prepaid rent, unearned service revenue C. Dividends, common stock D. Accounts payable, retained earnings

   Which set of accounts has the same type of normal balance?
A. Cash, accounts payable
B. Prepaid rent, unearned service revenue
C. Dividends, common stock
D. Accounts payable, retained earnings

Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin,… 1st Edition

Chapter 3, Problem 36

Instant Answer

Solved by Expert Puneet Prajapati

04/20/2020

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There are five types of accounts: assets, expenses, liabilities, revenue, and capital. Show more…

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Which set of accounts has the same type of normal balance? A. Cash, accounts payable B. Prepaid rent, unearned service revenue C. Dividends, common stock D. Accounts payable, retained earnings

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Key Concepts

Normal Balance

Normal balance refers to the inherent side of the accounting ledger on which an account typically carries its balance. For example, asset and expense accounts usually have a debit normal balance, while liability, equity, and revenue accounts usually have a credit normal balance.

Debits and Credits

Debits and credits are the fundamental tools in double-entry bookkeeping that record transactions in financial accounts. Each account is increased or decreased according to its normal balance with debits and credits, ensuring that the accounting equation remains balanced.

Account Classification

Account classification involves grouping accounts into categories such as assets, liabilities, equity, revenues, and expenses. Each classification adheres to standard normal balances, which helps in identifying the typical direction of change (debit or credit) for accounts within that classification.

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