When preparing a trial balance, which of the following accounts would typically

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Question: When preparing a trial balance, which of the following accounts would typically have a credit balance?

Options:

Correct Answer: Accounts Payable

Solution:

Accounts Payable typically has a credit balance, reflecting amounts owed to suppliers.

When preparing a trial balance, which of the following accounts would typically have a credit balance?

When preparing a trial balance, which of the following accounts would typically have a credit balance?

Step 1: Understand what a trial balance is. A trial balance is a list of all the accounts in the accounting system and their balances.
Step 2: Know that accounts can have either a debit balance or a credit balance.
Step 3: Identify what a credit balance means. A credit balance indicates that the account has more credits than debits.
Step 4: Learn that certain accounts usually have credit balances. These include liabilities, equity, and revenue accounts.
Step 5: Recognize that 'Accounts Payable' is a liability account. It shows money that the business owes to suppliers.
Step 6: Conclude that since 'Accounts Payable' is a liability, it typically has a credit balance.

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