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Credit may signify _________________. A) Decrease in assets B) Increase in liability C) Increase in capital account D) All of these

Credit may signify _________________.

A)

Decrease in assets

B)

Increase in liability

C)

Increase in capital account

D)

All of these

 

Grade:8

2 Answers

Rituraj Tiwari
askIITians Faculty 1792 Points
one year ago
The left side of asset accounts is used for recording increases and the right side is used for recording decreases. It is explained that the right side of liability and capital accounts is used to record increases; it naturally follows that he left side of such accounts is used to record decreases. The left side of all accounts, whether asset, liability or capital, is called debit and the right side is called credit. Consequently, a debit may signify either an increase or decrease, depending on the nature of the account, and a credit may likewise signify either an increase or decrease, depending on the nature of the account.
A credit may signify: An INCREASE in a liability or owner's equity account or a DECREASE in an asset account. The types of accounts with a normal credit balance. Revenue, liability, or capital account.
Vikas Amritiya
askIITians Faculty 234 Points
one year ago

The left side of asset accounts is used for recording increases and the right side is used for recording decreases. It is explained that the right side of liability and capital accounts is used to record increases; it  naturally follows that he left side of such accounts is used to record decreases. The left side of all accounts, whether asset, liability or capital, is called debit and the right side is called credit. Consequently, a debit may signify either an increase or decrease, depending on the nature of the account, and a credit may likewise signify either an increase or decrease, depending on the nature of the account. 

credit may signify: An INCREASE in a liability or owner's equity account or a DECREASE in an asset account. The types of accounts with a normal credit balance. Revenue, liability, or capital account.

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