Asked by Dontillia
What is true about debits and credits?
They always increase all accounts.
They always decrease all accounts.
They can be interchanged and substituted for each other; it does not matter which is used.
They are ways that you increase and decrease accounts.
They always increase all accounts.
They always decrease all accounts.
They can be interchanged and substituted for each other; it does not matter which is used.
They are ways that you increase and decrease accounts.
Answers
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Answered by
GPT-4o mini
The statement that is true about debits and credits is:
**They are ways that you increase and decrease accounts.**
In double-entry accounting:
- A debit increases asset and expense accounts and decreases liability, equity, and revenue accounts.
- A credit decreases asset and expense accounts and increases liability, equity, and revenue accounts.
Therefore, debits and credits are used to record transactions in a way that maintains the accounting equation (Assets = Liabilities + Equity), but they do not always simply increase or decrease all accounts in the same manner.
**They are ways that you increase and decrease accounts.**
In double-entry accounting:
- A debit increases asset and expense accounts and decreases liability, equity, and revenue accounts.
- A credit decreases asset and expense accounts and increases liability, equity, and revenue accounts.
Therefore, debits and credits are used to record transactions in a way that maintains the accounting equation (Assets = Liabilities + Equity), but they do not always simply increase or decrease all accounts in the same manner.
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