What is a normal debit balance?


Quick Answer

A normal debit balance is a financial term that is applied to certain types of accounts that are expected to have a debit balance. This expectation is determined by the classification of the account, with debit balances normally expected for losses, expenses, assets and owner's drawing accounts.

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Full Answer

The balance of an account that has a normal debit balance is that the balance value increases with every debit entry. Typically, the addition of a debit value on an normal debit balance account results in an increase in credit value in a directly opposite account type. An example is when a company receives a cash loan. In this scenario, the company credits its assets with a cash debit balance while at the same thing increasing its liabilities account with the same value in credit balance.

The opposite of a normal debit balance is a normal credit balance. Account types that fall under the normal credit balance definition include revenues, sales, owner equity and liabilities. These accounts increase their balance when a credit value is added and decrease when a debit value is added.

Certain account types, such as assets, liability, equity and revenue, also have a contra account which has the opposite normal balance type compared to the standard account.

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