Final answer:
An account is an individual record tracking increases and decreases in specific asset, liability, and stockholders' equity items, with the left side (the debit side) increasing assets and the right side (the credit side) increasing liabilities and equity.
Step-by-step explanation:
The correct statement about an account in the context of accounting and finance is B) an account is an individual accounting record of increases and decreases in specific asset, liability, stockholders' equity items. In the double-entry bookkeeping system, each financial transaction affects at least two accounts, and these accounts are recorded using a T-account structure. In this model, the left side represents the debit side and increases assets while decreasing liabilities and equity. Conversely, the right side represents the credit side, which decreases assets and increases liabilities and equity. The statement D) is incorrect as the left side of an account is the debit side, not the credit side. Also, option C) is inaccurate because there are separate accounts for specific stockholders' equity items, not just one account.
An account's balance is calculated as the sum of its debits minus the sum of its credits. A T-account visualizes this, with the total of the debit side on the left and the credit side on the right. If the total debits exceed credits, the account has a debit balance, and if the credits exceed debits, it has a credit balance. In the context of a bank's balance sheet, assets, liabilities, and net worth (or bank capital) must be balanced such that assets equal liabilities plus net worth.