PRC-1 · Chapter 3 · Question 60 of 100
An unknown account in a newly prepared trial balance shows a debit balance. According to accounting principles, this account must represent either:
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) An asset or an expense.
Explanation
In double-entry bookkeeping, debit balances inherently represent either an economic resource owned by the business (an asset) or a cost incurred during operations (an expense).
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