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Which account typically carries a credit balance?
SELECT ONLY ONE
(A) Accumulated Depreciation
(B) Utilities Expense
(C) Inventory
(D) Accounts Receivable
(E) Cash
Revelant knowledge
Credit balances are the total of funds borrowed, typically from a broker, and then that are deposited into the margin account after the success of the short sale.
A margin account that has only short positions will display an account balance.
The amount of the credit balance includes both the proceeds of the sale itself as well as the margin amount that the buyer must put in pursuant to Regulation T. 1
Correct answer: (A) Accumulated Depreciation
Explanation: Accumulated Depreciation refers to a contra asset account that has a credit normal balance. Utility expense, inventory, accounts receivable, and cash are always debited.