The nature of a balance sheet is such that any entry that ________ one side of the balance sheet will ________ the other side of the balance sheet.
A)increases; increase
B)increases; decrease
C)decreases; increase
D)decreases; not change

Question

Quizplus · Accepted Answer

The balance sheet follows the accounting equation (Assets = Liabilities + Equity), so any increase or decrease on one side (assets) must be matched by an equal increase or decrease on the other side (liabilities and equity), to keep the equation in balance.

The Nature of a Balance Sheet Is Such That Any