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Q: Credit balance in capital account means laibility or an asset?
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Why is a capital account has credit balance?

The normal balance in a capital account is a credit. Capital is a balance sheet account. Assets = Liabilities + Capital


Is an increase in Capital Stock a credit in the normal balance of an account?

Yes capital stock has credit balance as a normal balance so increase is also has credit balance.


What is the normal balance of a additional paid-in capital account?

Additional Paid-in Capital is a normal credit balance account.


Is capital a debit or credit to an owners equity?

Capital is a Credit Balance account. To increase capital and therefore increase OE, you will Credit the account. Not DEBIT. You Debit Cash, Credit Capital.


Does the owners capital account normally has a debit or credit balance?

Credit because it is an equity account


What is the normal balance of a capital account?

Capital account has credit balance as a normal balance of account as it is the amount company requires to return back to it's owner at the time of liquidation.


Does owner's capital account have a debit or credit balance?

Debit


Is paid in capital a debit or credit account?

Paid in capital is liability for business and like all liabilities it also has credit balance as normal balance.


Are treasury stocks a debit or credit?

Treasury stock is contra account for share capital account so as share capital has credit balance treasury stock has debit balance and shown as an asset under balance sheet.


Why drawing balance is debit?

Drawings account is contra account for reducing the owners capital account and as capital account is credit so contra account should be debit so that it can use to reduce the balance from owner’s capital.


Why capital and equity account have a credit balance?

Because they are both income. Capital and equity are sums of money deposited into an account. They are not withdrawals.


What happens to balance on drawings account at the end of accounting year?

Balance of drawing account is write off against owners capital at the end of fiscal year. Journal entry is as follows: [Debit] Owners capital [credit] Drawings account