Normal Balances of Accounts Assets Any Asset Liabilities Any liability CREDIT NORMAL BALANCE Owners' Equity Stockholders' Equity DEBIT (PEDIT ( 0 DEBIT NORMAL BALANCE NORMAL BALANCE Decrease Degree Increase Decrease Increase Any Revenue NORMAL BALANCE noase A record that summarizes all the transactions pertaining to a single item in the accounting equation is called an account. Any Expense ORMAL BALANCE Ince De Understanding the concept of Normal Balance is the key to preparing journal entries correctly. Define Normal Balance Transaction: Purchase $5000 equipment with cash What is the normal balance of "Equipment" account? How would you Increase Equipment Account (Debit or Credit?) What is the normal balance of "Cash" Account? How would you decrease Cash Account (Debit or Credit?) Resulting Journal Entry