An accountant has debited an asset account for $1,200 and credited a liability account for $500. What can be done to complete the recording of the transaction?
A) Nothing further must be done.
B) Debit a Stockholders' equity account for $700.
C) Debit another asset account for $700.
D) Credit a different asset account for $700.

Question

Quizplus · Accepted Answer

To balance the accounting equation, the total debits must equal the total credits. Since the asset account was debited for $1,200 and the liability account was credited for $500, an additional credit of $700 is needed. Crediting a different asset account for $700 will balance the transaction.

An Accountant Has Debited an Asset Account for $1,200 and Credited