Which of the following statements regarding accounts is TRUE?
A)An asset is increased by a debit and decreased by a credit.
B)Dividends are decreased by debits and increased by credits.
C)A liability is increased by a debit and decreased by a credit.
D)Revenue is increased by a debit; an expense is increased by a credit.

Question

Quizplus · Accepted Answer

The rule of debit and credit applies to different types of accounts in different ways. In the case of asset accounts, a debit entry increases the balance of the account, while a credit entry decreases it. So, statement A is true. Dividends are not a type of account, and statements B and D are incorrect. Similarly, in the case of liability accounts, a credit entry increases the balance, and a debit entry decreases it, making statement C false.

Which of the Following Statements Regarding Accounts Is TRUE