The statement that is true is: Credits decrease assets and increase liabilities.

Here's why:

1. In accounting, debits and credits are used to record changes in accounts. The rules for using debits and credits are based on the type of account.

2. For asset accounts, debits increase the balance and credits decrease the balance. This is because assets are economic resources that a business owns, so when you add more assets, you debit the account, and when you remove assets, you credit the account.

3. For liability accounts, the opposite is true. Debits decrease the balance and credits increase the balance. This is because liabilities are obligations that a business owes, so when you add more liabilities, you credit the account, and when you remove liabilities, you debit the account.

4. Therefore, the statement "Credits decrease assets and increase liabilities" is true. The other statements are not correct according to the rules of debits and credits in accounting.

Question

The statement that is true is: Credits decrease assets and increase liabilities.

Here's why:

1. In accounting, debits and credits are used to record changes in accounts. The rules for using debits and credits are based on the type of account.

2. For asset accounts, debits increase the balance and credits decrease the balance. This is because assets are economic resources that a business owns, so when you add more assets, you debit the account, and when you remove assets, you credit the account.

3. For liability accounts, the opposite is true. Debits decrease the balance and credits increase the balance. This is because liabilities are obligations that a business owes, so when you add more liabilities, you credit the account, and when you remove liabilities, you debit the account.

4. Therefore, the statement "Credits decrease assets and increase liabilities" is true. The other statements are not correct according to the rules of debits and credits in accounting.

Knowee AI · Accepted Answer

The statement that is true is: Credits decrease assets and increase liabilities.

Here's why:

1. In accounting, debits and credits are used to record changes in accounts. The rules for using debits and credits are based on the type of account.

2. For asset accounts, debits increase the balance and credits decrease the balance. This is because assets are economic resources that a business owns, so when you add more assets, you debit the account, and when you remove assets, you credit the account.

3. For liability accounts, the opposite is true. Debits decrease the balance and credits increase the balance. This is because liabilities are obligations that a business owes, so when you add more liabilities, you credit the account, and when you remove liabilities, you debit the account.

4. Therefore, the statement "Credits decrease assets and increase liabilities" is true. The other statements are not correct according to the rules of debits and credits in accounting.

Which of the following statements is true? Group of answer choices Debits increase assets and increase liabilities. Credits decrease assets and decrease liabilities. Credits decrease assets and increase liabilities. Debits increase liabilities and decrease assets.

Question

Solution

Similar Questions

Upgrade your grade with Knowee