Which one of the followings is TRUE? Select one:a.AccountEffect of transactionEntry in accountAssetsIncreaseCreditLiabilityIncreaseDebitCapitalIncreaseCreditb.AccountEffect of transactionEntry in accountAssetsIncreaseDebitLiabilityIncreaseDebitCapitalIncreaseCreditc.AccountEffect of transactionEntry in accountAssetsIncreaseDebitLiabilityIncreaseCreditCapitalIncreaseCreditd.AccountEffect of transactionEntry in accountAssetsDecreaseDebitLiabilityIncreaseCreditCapitalDecreaseCredit

Answered: c. Account Effect of transaction Entry…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Which one of the followings is TRUE?

Select one:

Account	Effect of transaction	Entry in account
Assets	Increase	Credit
Liability	Increase	Debit
Capital	Increase	Credit

Account	Effect of transaction	Entry in account
Assets	Increase	Debit
Liability	Increase	Debit
Capital	Increase	Credit

Account	Effect of transaction	Entry in account
Assets	Increase	Debit
Liability	Increase	Credit
Capital	Increase	Credit

Account	Effect of transaction	Entry in account
Assets	Decrease	Debit
Liability	Increase	Credit
Capital	Decrease	Credit

Expert Solution

Assets and liabilities

Assets indicate the resources owned or possessed by the entity and it could be converted to cash. A debit entry increases an asset and credit entry decreases the assets. Liabilities indicate the obligation of entities towards creditors. A debit entry decreases the liability and credit entry increases the liability.

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