Under a double-entry accounting system, show how the entry for each transaction listed is entered in the ledger by choosing debit or credit to indicate the increase or decrease in the effected account.
-An increase in Dividends paid
A) Debit
B) Credit

Question

Quizplus · Accepted Answer

Dividends paid increase with a debit because they represent a distribution of earnings to shareholders, reducing retained earnings, which is an equity account. In double-entry accounting, increases in expense and distribution accounts are recorded as debits.

Under a Double-Entry Accounting System, Show How the Entry for Each