A business uses a credit to record:
A)An increase in an expense account.
B)A decrease in an asset account.
C)A decrease in an unearned revenue account.
D)A decrease in a revenue account.
E)A decrease in an equity account.

Question

Quizplus · Accepted Answer

A credit is used to decrease an asset account. When a business receives credit, it is essentially borrowing money and increasing their liability, which must be paid back in the future. This decrease in an asset account reflects the borrowing of money and the increase in a liability.

A Business Uses a Credit to Record