Final answer:
A credit balance on a corporate balance sheet usually signifies a liability, and hence the answer is b) Liability, Credit. Assets and liabilities are key components of a balance sheet, representing what the company owns and owes, respectively.
Step-by-step explanation:
Under a corporate balance sheet, the credit balance represents a liability, and it is a credit balance. This means the correct answer to the student's question is b) Liability, Credit. A balance sheet reflects a company's financial position at a specific point in time and lists assets, liabilities, and owners' equity. Assets are what the company owns and can be used to generate income, while liabilities are obligations that the company owes to others. The difference between total assets and total liabilities is known as equity or net worth.
In accounting, assets typically have a debit balance, whereas liabilities and equity (which includes net income) typically have a credit balance. Therefore, when we say an account has a credit balance, it usually means it falls under liabilities or equity, not assets or expenses, which would have a debit balance.