The rules of debit and credit may be summarized as follows:
A)Asset accounts are increased by debits,whereas,liabilities and owners' equity are increased by credits.
B)The balance of a ledger account is increased by debit entries and is decreased by credit entries.
C)Accounts on the left side of the balance sheet are increased by credits,whereas accounts on the right side of the balance sheet are increased by debits.
D)The balance of a ledger account is increased by credit entries and is decreased by debit entries.

Question

Quizplus · Accepted Answer

A) Asset accounts, which are on the left side of the balance sheet, are indeed increased by debits, while liabilities and owners' equity accounts, which are on the right side, are increased by credits. This follows the fundamental accounting equation and the double-entry bookkeeping system.

The Rules of Debit and Credit May Be Summarized as Follows