Question

Which of the following is true about a "credit"? I. It is part of the double-entry procedure that keeps the accounting equation in balance. II. It represents a decrease to assets. III. It represents an increase to liabilities. IV. It is on the right side of a T-account.

Answer 1

Answer:

All of the statements are correct

Explanation:

All of the statements are correct

As in an accounting entry there is an account which is debited and an account which is credited.

Although there might be numerous accounts which are debited or credited at the same time.

Thus, every credit in an entry balances the accounting equation, with respect to the assets and liabilities and stockholder's equity.

Further as assets show debit balance, whenever there balance decreases the assets are credited.

Liabilities show a credit balance, whenever it is increased it will be credited.

In a t shape account all debits are placed right side, and all the credits are shown on the right side.