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.Continue Reading
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.Learn more about Accounting