Which of the following is true?
A) Credits increase both assets and liabilities.
B) Credits increase assets and decrease liabilities.
C) Credits increase liabilities and decrease assets.
D) Credits decrease both assets and liabilities.

Question

Quizplus · Accepted Answer

In double-entry accounting, credits are used to record increases in liabilities and decreases in assets. This is because when a liability increases, it means that the company owes more money, and when an asset decreases, it means that the company has less value in terms of resources or cash. Therefore, option C is the correct answer.

Which of the Following Is True