Which set of accounts below would have a normal debit balance?

• A. Revenues and Equity
• B. Liabilities and Revenues
• C. Liabilities and Equity
• D. Assets and Expenses

Answer: (D)

Verified step by step guidance

1. Understand the concept of normal balances: In accounting, each account type has a normal balance, which is the side (debit or credit) that increases the account. Assets and expenses typically have a normal debit balance, while liabilities, equity, and revenues have a normal credit balance.
2. Review the account types: Assets represent resources owned by the business, and expenses represent costs incurred during operations. Both of these account types increase with debits and decrease with credits.
3. Analyze the options provided: Revenues and equity, liabilities and revenues, and liabilities and equity all have normal credit balances. Assets and expenses are the only account types with normal debit balances.
4. Relate the concept to the accounting equation: The accounting equation is Assets = Liabilities + Equity. Assets are on the debit side of the equation, while liabilities and equity are on the credit side. Expenses reduce equity, which is why they also have a normal debit balance.
5. Conclude the reasoning: Based on the normal balance rules and the accounting equation, the correct answer is 'Assets and Expenses,' as these account types increase with debits.