Multiple Choice
Which of the following accounts increases with a debit under the normal debit/credit rules?
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2. Transaction Analysis
Journal Entries: Debits and Credits
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In journal entries using the standard rules for debits and credits, a debit is used to record which of the following?
A
An increase in a revenue account (e.g., Service Revenue)
B
An increase in an asset account (e.g., Cash)
C
An increase in a liability account (e.g., Accounts Payable)
D
A decrease in an expense account (e.g., Rent Expense)
Verified step by step guidance1
Understand the basic accounting equation: \(\text{Assets} = \text{Liabilities} + \text{Equity}\). This equation is the foundation for how debits and credits affect accounts.
Recall the rules for debits and credits: Debits increase asset and expense accounts, and decrease liability, equity, and revenue accounts. Credits do the opposite.
Identify the type of account in the question. For example, an asset account like Cash increases with a debit entry.
Analyze each option: An increase in a revenue account is recorded with a credit, an increase in a liability account is recorded with a credit, and a decrease in an expense account is recorded with a credit.
Conclude that a debit is used to record an increase in an asset account, such as Cash, based on the standard rules of debits and credits.
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