Final answer:
In accounting, debiting dividends decreases retained earnings, debiting accounts payable decreases liabilities, and debiting equipment increases assets. Crediting each of these accounts has the opposite effect.
Step-by-step explanation:
In accounting, every transaction involves a debit and a credit entry to maintain a balanced ledger. The effects of these on specific account balances can be understood through the lens of the accounting equation: Assets = Liabilities + Equity.
- Dividends: When a company declares dividends, it records a debit to the Dividends account, which decreases retained earnings (part of equity). A credit entry to this account would reduce the amount of the dividend, thus increasing retained earnings.
- Accounts Payable: As a liability, credit increases Accounts Payable, indicating that the company owes more to its suppliers or creditors. Conversely, a debit decreases Accounts Payable, implying a payment has been made, reducing what is owed.
- Equipment: Equipment is an asset, so debiting this account increases its balance, reflecting the acquisition of new equipment or the value of existing equipment. Crediting the Equipment account would decrease its balance, which could occur if equipment is sold or its value is written down.