Journal Entry : It refers to the process of recording the data into books of accounts on continuous basis. It is a process of record keeping for every transaction by a company or a firm. Rules of Journal Entry: The rules for journal entry are defined by five accounting components, Assets: Increase in asset should be debit and decrease should be credit. Liabilities: Increase in liabilities should be credit and decrease should be debit. Equity: Increase in Equity should be credit and decrease should be debit. Expense: Increase in expense should be debit and decrease should be credit. Revenue: Increase in revenue should be credit and decrease should be debit. To Identify: Correct statement from given statements. Answer: Journal Entry given in option c is correct.

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Chapter 2, Problem 3MCQ

To determine

Journal Entry:

It refers to the process of recording the data into books of accounts on continuous basis. It is a process of record keeping for every transaction by a company or a firm.

Rules of Journal Entry: The rules for journal entry are defined by five accounting components,

Assets: Increase in asset should be debit and decrease should be credit.

Liabilities: Increase in liabilities should be credit and decrease should be debit.

Equity: Increase in Equity should be credit and decrease should be debit.

Expense: Increase in expense should be debit and decrease should be credit.

Revenue: Increase in revenue should be credit and decrease should be debit.

To Identify: Correct statement from given statements.

Answer:

Journal Entry given in option c is correct.

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