Which statement about debits and credits is true?

Which statement about debits and credits is true?

• A. Debits increase assets and expenses
• B. Debits decrease assets and expenses
• C. Debits increase revenues and equity
• D. Debits increase liabilities and revenues

Answer: (A)

In double-entry accounting, different account types have normal balance sides. Assets and expenses carry debit balances, so increases to those accounts are recorded with a debit. That’s why the statement that debits increase assets and expenses is true: a debit raises the balance of asset accounts (like cash) and also raises expense accounts (like rent expense). Understanding the other possibilities helps: revenues, equity, and liabilities have credit balances, so increasing them is done with credits, not debits. Debiting a liability or revenue would decrease, not increase, those balances. A simple example: paying cash for rent debits Rent Expense (increasing the expense) and credits Cash (decreasing the asset). This illustrates how debits boost asset and expense accounts while credits boost liabilities, equity, and revenues.

In double-entry accounting, different account types have normal balance sides. Assets and expenses carry debit balances, so increases to those accounts are recorded with a debit. That’s why the statement that debits increase assets and expenses is true: a debit raises the balance of asset accounts (like cash) and also raises expense accounts (like rent expense).

Understanding the other possibilities helps: revenues, equity, and liabilities have credit balances, so increasing them is done with credits, not debits. Debiting a liability or revenue would decrease, not increase, those balances.

A simple example: paying cash for rent debits Rent Expense (increasing the expense) and credits Cash (decreasing the asset). This illustrates how debits boost asset and expense accounts while credits boost liabilities, equity, and revenues.