BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Revenue accounts normally have CREDIT balances. (Revenues will cause owner equity to increase and owner equity normally has a credit balance.) The drawing account normally has a debit balance and should be debited when the owner withdraws assets from the business for personal use.

Detailed explanation-2: -In bookkeeping, revenues are credits because revenues cause owner’s equity or stockholders’ equity to increase. Recall that the accounting equation, Assets = Liabilities + Owner’s Equity, must always be in balance.

Detailed explanation-3: -Revenue accounts are credited because it has increased. The normal balance of revenue or income is credit. Therefore, when a bookkeeper records a credit on a revenue account, it means that the company was able to earn more income for the period.

Detailed explanation-4: -Revenues cause owner’s equity to increase. Since the normal balance for owner’s equity is a credit balance, revenues must be recorded as a credit.

Detailed explanation-5: -To record revenue from the sale from goods or services, you would credit the revenue account. A credit to revenue increases the account, while a debit would decrease the account.