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28 July, 05:03

Which of the following accounts follows the rules of debit and credit in relation to increases and decreases in the opposite manner? Dividends and Interest Revenue Advertising Expense and Land Interest Payable and Common Stock Prepaid Insurance and Dividends

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  1. 28 July, 07:46
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    The correct answer is Interest Revenue and Dividends

    Explanation:

    Equity decreases is debited and increases is credited. This is the opposite credit and debit rule which is used for assets. In the terms of credit and debit, Accounts debits = Equity credits + liability credits

    Interest revenue is the earnings which is received from investment and it is credited whereas the dividends is the expense which is paid to the shareholders.

    Therefore, the accounts which follow the debit and credit rule in opposite manner, these are interest revenue and dividends.
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