An accountant has debited an asset account for $1300 and credited a liability account for $600. Which of the following would be an incorrect way to complete the recording of the transaction?
A) Credit an asset account for $700.
B) Credit another liability account for $700.
C) Credit an owner's equity account for $700.
D) Debit an owner's equity account for $700.

Question

Quizplus · Accepted Answer

Option A is correct as it balances the transaction by crediting an asset account.

Option B is correct as it balances the transaction by crediting another liability account.

Option C is correct as it balances the transaction by crediting an owner's equity account.

Option D is incorrect as it would increase the owner's equity account, which is not affected by the original transaction.

An Accountant Has Debited an Asset Account for $1300 and Credited