CA Foundation · Accounting · Accounting Process
Which of the following accounts normally shows a credit balance when balanced in the ledger?
The Capital Account of the proprietor normally shows a credit balance. Capital represents the owner's claim on the business and increases with credits, whereas drawings, sundry debtors and furniture are debit-balance accounts representing a reduction of capital or assets.
- ACapital Account of the proprietorCorrect
- BDrawings Account
- CSundry Debtors Account
- DFurniture Account
Explanation
Capital is a liability to the owner, which increases by credit and so carries a credit balance. Drawings, debtors and furniture are a reduction of capital and assets respectively, so they carry debit balances.
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