What is the normal balance of the Sales account?

• A. Credit
• B. Asset
• C. Debit
• D. Liability

Answer: (A)

Revenue accounts, like Sales, have a credit normal balance. That means they normally sit on the credit side because they increase the owner's equity through earnings. When a sale happens, you record it by creditting Sales Revenue (for example, cash sales credit Sales and debit Cash; sales on account credit Sales and debit Accounts Receivable). Those credits push the Sales account balance to the right. A debit would only occur if there were returns, allowances, or errors reducing revenue. Since Sales is a temporary (closing) account, its balance is transferred to equity at period end, but its natural state remains a credit balance.