Normal Balances

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The sum of the increases in an account is usually equal to or greater than the sum of the decreases in the account. Thus, the normal balance of an account is either a debit or credit depending on whether increases in the account are recorded as debits or credits. For example, since asset accounts are increased with debits, asset accounts normally have debit balances. Likewise, liability accounts normally have credit balances.

The rules of debit and credit and the normal balances of the various types of accounts are summarized in the below table.

Normal Balances

Normal Balances

Debits and credits are sometimes abbreviated as Dr. for debit and Cr. for credit.

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