For accounts payable, normal balance is the direction of a ledger’s credit or debit. This indicates how much you owe versus what you are owed as a business. Normally, if an account is seen on a trial balance sheet and its associated normal balance is a credit, then it means that credit increases the amount owed to the company. On the other hand, if its normal balance is a debit, then it implies that a debt has been incurred by the firm. Understanding these two concepts gives businesses insight into their financial health, aiding them in making smart decisions for the future.