Question

A business uses a credit to record:

1) Increase in assets
2) Decrease in assets
3) Increase in liabilities
4) Decrease in liabilities

Answer 1

A business uses a credit to record an increase in liabilities.

Step-by-step explanation:

In a T-account, a business uses a credit to record an increase in liabilities. This means that when a business borrows money or incurs a debt, it will use a credit to record this increase in liabilities on the right side of the T-account.

For example, if a business takes out a loan, it will record the loan as a credit on the liabilities side of the T-account. This indicates an increase in the business's liabilities because it now owes money to the lender.