Which of the following accounts has a normal credit balance under double-entry accounting?

• A. Supplies
• B. Prepaid Insurance
• C. Accounts Receivable
• D. Unearned Revenue

Answer: (D)

Verified step by step guidance

1. Understand the concept of normal balances in double-entry accounting: Assets and expenses typically have a normal debit balance, while liabilities, equity, and revenue accounts usually have a normal credit balance.
2. Identify the nature of each account listed: Supplies, Prepaid Insurance, and Accounts Receivable are asset accounts, which normally carry debit balances.
3. Recognize that Unearned Revenue is a liability account because it represents money received before services are performed or goods are delivered.
4. Recall that liability accounts have a normal credit balance, meaning increases are recorded on the credit side and decreases on the debit side.
5. Conclude that among the options, Unearned Revenue is the account with a normal credit balance.