The normal balance of capital account is_____________?
Correct answer: A. Credit balance
- A. Credit balance
- B. Debit balance
- C. Cash balance
- D. Neither debit nor credit balanceCompare Personal Loans
Explanation
Capital is the owner's claim on the business and normally increases through credits, including additional investment and profit. Its normal balance is therefore credit.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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