For asset and expense accounts, the normal balance is a debit balance. For liability, equity and revenue accounts, the normal balance is a credit balance. This transaction will require a journal entry that includes an expense account and a cash account.
Full Answer
Accounts that normally have a debit balance include assets, expenses, and losses. Examples of these accounts are the cash, accounts receivable, prepaid expenses, fixed assets (asset) account, wages (expense) and loss on sale of assets (loss) account.
For placement, a debit is always positioned on the left side of an entry (see chart below). A debit increases asset or expense accounts, and decreases liability, revenue or equity accounts. A credit is always positioned on the right side of an entry.
According to the basic accounting principles, the ledger accounts that typically have credit balances are the ledger accounts of income, liabilities, provisions, reserves, capital and others.
The debit balance is the amount of cash the customer must have in the account following the execution of a security purchase order so that the transaction can be settled properly.