When the bank takes money out of a company's account, why does the bank say that they have debited that account?
A)The bank has increased the company's assets and assets increase with debits.
B)The bank has decreased its' liability to the company and liabilities decrease with debits.
C)The bank has decreased the company's assets and assets decrease with debits.
D)The bank has increased its' liability to the company and liabilities increase with debits.

Question

Quizplus · Accepted Answer

When a bank takes money out of a company's account, it decreases its liability to the company. In accounting, a decrease in liabilities is recorded as a debit.

When the Bank Takes Money Out of a Company's Account