Asked by Brittany Hoffman on Jun 15, 2024
Verified
Which of the following is true regarding debits and credits?
A) Whether a debit or credit increases or decreases an account depends on the type of account.
B) Debits increase an account and credits decrease an account.
C) Credits increase an account and debits decrease an account.
D) There are some circumstances that allow for debits and credits to not equal.
Debits And Credits
Fundamental accounting principles that are used to record every financial transaction, where debits must equal credits in every transaction.
Account Type
A classification system used within accounting to differentiate between the various financial transactions, assets, liabilities, and owners' equity carried out or held by a business.
Increases
Refers to the growth or rise in numbers, values, quantities, or activities.
- Understand the principles of debits and credits in accounting.
Verified Answer
SL
Sidney LancasterJun 15, 2024
Final Answer :
A
Explanation :
Debits and credits affect accounts differently depending on the account type. For assets and expenses, debits increase the account, while for liabilities, equity, and revenue, credits increase the account. This principle is fundamental to double-entry bookkeeping, where every transaction involves both a debit and a credit to maintain the accounting equation.
Learning Objectives
- Understand the principles of debits and credits in accounting.