122k views
5 votes
Which of the following is true about a "credit"?a) It is part of the double-entry procedure that keeps the accounting equation in balance. b) It represents a decrease to assets. c) It represents an increase to liabilities. d) It is on the right side of a T-account.

User Corbee
by
8.2k points

1 Answer

2 votes

Answer:

All of them.

Step-by-step explanation:

Accounting systems are designed to show the increases and decreases in each financial statement item as a separate record. This record is called an account. In the T account, the debit is on the left and the credit is on the right.

The equity for credits and debits for each transaction is build into the accounting equation: assets = liabilities + equity. Because of this doble equality, this system is called double entry accounting system.

In balance sheet accounts:

-asset accounts debit for increases and credit for decreases.

-liability accounts debit for decreases and credit for increases.

-equity accounts debit for decreases and credit for increases.

User Hakim
by
7.7k points

No related questions found

Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.