Question

Which of the following statements is true? A. Expenses are decreased by debits. B. Liabilities are decreased by credits. C. Revenues are increased by credits. D. Assets are decreased by debits.

Answer 1

Answer: Option C

Explanation:

A. As per the general principles of accounting expenses are recorded on the debit side thus they are increases when debit transaction is made.

B. Transactions involving liabilities are recorded on credit side of the accounts.

C. Revenues are recorded on credit side of the transactions thus revenues increased when accounts are credited.

D. Transactions involving purchase of assets are recorded on debit side thus debit transactions increases debits.