A debit is used to record which of the following:<\/p>\n\n\n\n
Group of answer choices<\/p>\n\n\n\n
An increase in a revenue account
A decrease in an expense account
An increase in the dividends account
A decrease in an asset account<\/p>\n\n\n\n
The Correct Answer and Explanation is:<\/mark><\/strong><\/p>\n\n\n\n Correct Answer: An increase in the dividends account<\/strong><\/p>\n\n\n\n In accounting, the terms debit<\/strong> and credit<\/strong> are foundational to the double-entry system<\/strong>. Each financial transaction affects at least two accounts in a company’s ledger and maintains the accounting equation:<\/p>\n\n\n\n $$ Debits and credits<\/strong> are used to record these changes. Depending on the type of account, a debit or credit will increase or decrease the account balance.<\/p>\n\n\n\n Let\u2019s examine each option to understand which is correctly associated with a debit<\/strong>:<\/p>\n\n\n\n Revenue accounts (like Sales Revenue or Service Revenue) are increased with a credit<\/strong>, not a debit. A debit would decrease<\/strong> revenue.<\/p>\n\n\n\n Expense accounts (like Rent Expense or Salaries Expense) are increased with a debit<\/strong>. If you’re decreasing an expense, it would require a credit<\/strong>, not a debit.<\/p>\n\n\n\n Dividends are a distribution of earnings to shareholders<\/strong> and represent a reduction in retained earnings (part of equity). The Dividends account<\/strong> is a contra equity account<\/strong>, and increases in this account are recorded with a debit<\/strong>. This is because dividends reduce equity, and equity normally increases with credits. Thus, to increase dividends (and reduce equity), we debit<\/strong> the account.<\/p>\n\n\n\n Assets (like Cash or Equipment) normally increase with debits<\/strong> and decrease with credits<\/strong>. So a decrease<\/strong> in an asset account would be recorded with a credit<\/strong>, not a debit.<\/p>\n\n\n\n A debit<\/strong> increases assets, expenses, and dividends accounts, and decreases liabilities, revenues, and equity accounts. Therefore, an increase in the dividends account<\/strong> is correctly recorded with a debit<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":" A debit is used to record which of the following: Group of answer choices An increase in a revenue accountA decrease in an expense accountAn increase in the dividends accountA decrease in an asset account The Correct Answer and Explanation is: Correct Answer: An increase in the dividends account Explanation: In accounting, the terms debit […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-216132","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/216132","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=216132"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/216132\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=216132"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=216132"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=216132"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n\n\n\nExplanation:<\/strong><\/h3>\n\n\n\n
\\text{Assets} = \\text{Liabilities} + \\text{Equity}
$$<\/p>\n\n\n\n
\n\n\n\n1. An increase in a revenue account<\/strong> \u2013 \u274c Incorrect<\/h4>\n\n\n\n
\n\n\n\n2. A decrease in an expense account<\/strong> \u2013 \u274c Incorrect<\/h4>\n\n\n\n
\n\n\n\n3. An increase in the dividends account<\/strong> \u2013 \u2705 Correct<\/strong><\/h4>\n\n\n\n
\n\n\n\n4. A decrease in an asset account<\/strong> \u2013 \u274c Incorrect<\/h4>\n\n\n\n
\n\n\n\nSummary:<\/h3>\n\n\n\n