Multiple Choice
In journal entries, a credit to Cash will generally have what effect on the Cash account balance?
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2. Transaction Analysis
Journal Entries: Debits and Credits
Multiple Choice
In a standard journal entry, a debit is used to record which of the following effects on an account?
A
An increase in a revenue account
B
A decrease in an expense account
C
An increase in an asset account
D
An increase in a liability account
Verified step by step guidance1
Understand the basic accounting equation: \(\text{Assets} = \text{Liabilities} + \text{Equity}\). This equation is the foundation of double-entry accounting.
Recall that in double-entry accounting, every transaction affects at least two accounts, with debits and credits used to record these changes.
Know the normal balance of different types of accounts: assets and expenses normally have debit balances, while liabilities, equity, and revenue normally have credit balances.
Recognize that a debit entry increases asset and expense accounts but decreases liability, equity, and revenue accounts.
Therefore, a debit is used to record an increase in an asset account, which aligns with the correct answer provided.
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