Which statement about debits and credits is correct?

Answer

A debit increases an asset and decreases a liability

Options - A. A debit increases an asset and decreases a liability - B. A credit always increases the account it is posted to - C. A debit always reduces the balance of any account - D. A credit increases assets, as it does liabilities Why - A. Correct — debit is the left side; the left increases an asset (the equation’s left) and decreases a liability (the equation’s right). - B. A credit increases liabilities, equity and revenues but decreases assets, expenses and dividends. - C. Debit is a side, not a direction; it increases assets, expenses and dividends. - D. Assets increase on the left, with a debit; only the right-hand elements increase with a credit.

Hermanson Vol 1 ch 2 (derivation at the T-account, rules, normal balances); Dauderis & Annand §2.1 (concept map C1–C4)