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14 April, 19:07

For the following accounts used by a retail business, determine the normal balance of each account (i. e., does the account normally have a debit or a credit balance?). mark each either debit or credit

Debit Credit

Freight-out

Income Summary with Net Income

Sales Discounts

Sales

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  1. 14 April, 19:18
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    Freight out - Debit

    Income Summary with net income - Credit

    Sales discounts - Debit

    Sales - Credit

    Explanation:

    First, we consider the description of the listed items and then determine their placements

    Freight-out represents an expense that is related to transporting goods out the organisation to customers who have made purchases. As such it will have a debit balance as an expense

    Income summary with net income - this simply means the amounts reported in the income summary shows a credit side that is higher than the debit side, meaning income is higher than expenses. Hence, it will have a credit balance.

    Sales Discounts is a figure or an amount that reduces sales, hence if sales goes on the credit side, sales discount will show on the debit side.
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