Which account type has a normal debit balance?

The account type that has a normal debit balance is assets. This means that when an asset account is increased, it is recorded with a debit entry, which increases its balance. Asset accounts represent resources owned by a business, such as cash, inventory, and equipment.

Understanding the normal balances of account types is crucial for proper accounting practices. For example, when you purchase an asset, you would debit the asset account to reflect its increased value on the balance sheet. In double-entry accounting, every transaction affects at least two accounts, so debiting an asset will often be accompanied by a credit entry to another account, such as cash or accounts payable.

In contrast, liabilities and revenue accounts typically have normal credit balances, meaning they are increased with credit entries. Common stock also has a normal credit balance as it represents equity invested in the business by its owners. Knowing these normal balances helps ensure accurate financial reporting and assists in maintaining the accounting equation: Assets = Liabilities + Equity.