"All debits are increases and all credits are decreases." Is this a correct statement?
What will be an ideal response?
Answer: This is not a correct statement. The double entry-system of accounting is a system of accounting in which every transaction affects at least two accounts. As transactions are analyzed and recorded, the rules of debits and credits keep the accounting equation in balance. Assets, expenses and dividends are increased with a debit and decreased with a credit. Liabilities, revenues, and common stock are increased with a credit and decreased with a debit.
You might also like to view...
When a manufacturer seeks a market for by-products and accepts a price that covers more than the cost of storing and delivering those by-products, the manufacturer is able to reduce the main product's price to make it more competitive
Indicate whether the statement is true or false
The field of government relations is a fertile one for public relations graduates
Indicate whether the statement is true or false