Multiple Choice
In a standard journal entry using the rules of debits and credits, which type of account is increased with a debit?
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2. Transaction Analysis
Journal Entries: Debits and Credits
Multiple Choice
In financial accounting, which type(s) of accounts increase with a debit?
A
Liabilities, revenues, and common stock
B
Assets, expenses, and dividends (or drawings)
C
Liabilities and expenses only
D
Assets and revenues only
Verified step by step guidance1
Understand the basic accounting equation: \(\text{Assets} = \text{Liabilities} + \text{Equity}\). This equation helps determine how different accounts behave with debits and credits.
Recall the normal balance of accounts: Assets, expenses, and dividends typically have a debit balance, meaning they increase with debits.
Liabilities, revenues, and common stock usually have a credit balance, so they increase with credits, not debits.
Therefore, identify which accounts increase with debits by focusing on those with normal debit balances: assets, expenses, and dividends (or drawings).
Use this understanding to eliminate incorrect options and confirm that the correct answer includes assets, expenses, and dividends as accounts that increase with a debit.
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