1Debit refers to the right side of the T-account, and credit refers to the left side.
2In the standard accounting system, we use double entry accounting, which means we record the dual effects of each transaction.
3An asset account is increased by a debit.
4A stockholders’ equity account is increased by a debit.
5A liability account is increased by a debit.
6Which of the following accounts increases with a credit?
A) Cash
B) Common stock
C) Accounts receivable
D) Prepaid expenses
7Which of the following accounts decreases with a credit?
C) Accounts payable
D) Retained earnings
8Which of the following accounts increases with a debit?
B) Interest payable
D) Common Stock
9Which of the following accounts decreases with a debit?
A) Notes payable
B) Prepaid insurance
C) Cash
D) Land
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