A knowledge of the normal balances of accounts would help you spot which of the following as an error in recording?

Question

Quizplus · Accepted Answer

An expense account is supposed to have a debit balance, so a credit balance would indicate an error in recording.

A, C, and D are not necessarily errors in recording. Dividends are typically recorded as debits, but if the company had positive retained earnings, the dividends account could have a debit balance. Liabilities can have credit balances if the company owes more money than it has in its accounts. Revenue accounts are supposed to have credit balances.

A Knowledge of the Normal Balances of Accounts Would Help