Q:

Which accounts have a normal credit balance?

A:

Quick Answer

The accounts that have a normal credit balance include contra-asset, liability, gain, revenue, owner's equity and stockholders' equity accounts. In contrast, accounts that normally have a debit balance include the asset, loss, contra-liability, owner's drawing, dividend and expense accounts. In accounting, when one account gets a credit, another gets a debit, so there is a balance in the accounting equation.

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Full Answer

The reason that expense accounts typically have a debit balance is because the accounts increase as expenses are incurred. As expenses are paid, expense accounts get credited. If there were to be an overpayment, then the expense accounts could have a credit balance. Furthermore, an expense account may have a credit balance if the company makes a reversing entry to carry it to a new accounting period.

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