Which of the following debit and credit rules is correct? A. Decreases in assets and liabilities are credited. B. Increases in liabilities and stockholders' equity are credited. C. Increases in liabilities and stockholders' equity are debited. D. Increases in assets and liabilities are debited.

Question

Business

Jaden Weeks

7 April, 11:50

Which of the following debit and credit rules is correct? A. Decreases in assets and liabilities are credited. B. Increases in liabilities and stockholders' equity are credited. C. Increases in liabilities and stockholders' equity are debited. D. Increases in assets and liabilities are debited.

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Answers (1)

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Tristian · Answer 1

B. Increases in liabilities and stockholders' equity are credited.

Explanation:

As Liabilities and Stockholder's equity have credit balance, so a credit entry will increase their value and debit entry will decrease its balance. On the other hand assets accounts have debit balance, a credit entry will decrease its balance and debit entry will increase it. So the correct option is B. Increases in liabilities and stockholders' equity are credited.