Do asset accounts normally have debit balances?

• A. True
• B. Never
• C. Sometimes
• D. False

Answer: (A)

Asset accounts have a debit balance because increases to assets are recorded on the left (debit) side, while decreases are on the right (credit) side. This aligns with the idea that assets grow when you debit them—like buying equipment (debit Equipment) or receiving cash (debit Cash). A common way to see this is that the normal entry for acquiring an asset is to debit the asset account and credit something else (cash, a liability, or equity). There is a helpful nuance: some asset-related accounts are contra assets, such as Accumulated Depreciation, which carry credit balances to offset the asset on the balance sheet. But for typical asset accounts, the normal balance is a debit, so the statement is true.