Final Answer:
The correct debit entry related to the purchase of the building on February 6 is (b) Building asset. This is because when a building is acquired, it becomes a tangible asset for the business, representing a long-term value that will benefit the company over time.
Step-by-step explanation:
When a business purchases a building, the accounting entry involves recognizing the building as an asset on the balance sheet. The debit entry is made to increase the asset side of the balance sheet, indicating the acquisition of a valuable property. In this case, the building is not an expense that is immediately consumed but rather an investment with enduring value.
The debit entry to the Building asset account is in accordance with the fundamental accounting equation: Assets = Liabilities + Equity. By debiting the Building asset account, we increase the assets of the business. The corresponding credit entry would typically involve a liability (e.g., a mortgage or cash if the purchase is made outright), representing the financing side of the transaction. This ensures that the accounting equation remains balanced.
It's important to distinguish between expenses and assets in accounting. Expenses, such as Building expense, are incurred for the purpose of generating revenue and are recorded on the income statement. On the other hand, assets, like buildings, represent future economic benefits and are recorded on the balance sheet. The purchase of a building involves a long-term investment, making the building an asset rather than an immediate expense.