Which of the following statements is incorrect?
A) The normal balance of the accounts receivable account is a debit.
B) The normal balance of the owner's withdrawals account is a debit.
C) The normal balance of an unearned revenues account is a credit.
D) The normal balance of an expense account is a credit.
E) The abnormal balance of a revenue account is a debit.

Question

Quizplus · Accepted Answer

The normal balance of an expense account is a debit, not a credit. Expenses are debits because they represent increases in a company's costs or decreases in its assets. The other statements are all correct: accounts receivable normal balance is a debit because it represents money owed to the company, owner's withdrawals normal balance is a debit because it represents decreases to the owner's equity, unearned revenue normal balance is a credit because it represents a liability owed to the customer, and revenue accounts have normal balances of credits because they represent increases to a company's assets or decreases in its liabilities. The last statement is also correct in that revenue accounts typically have abnormal debit balances only in cases of unusual transactions or errors.

Which of the Following Statements Is Incorrect