Question

When recording transactions, what is increased by debits and decreased by credits?

Liabilities

Common stocks

Expenses

Revenues

Answer 1

In accounting, the following relationships apply:

- **Liabilities**: Increased by credits and decreased by debits.
- **Common Stocks**: Increased by credits and decreased by debits.
- **Expenses**: Increased by debits and decreased by credits.
- **Revenues**: Increased by credits and decreased by debits.

Therefore, the correct answer to your question, "What is increased by debits and decreased by credits?" is **Expenses**.