A credit is used to record a decrease in asset accounts and expense accounts. In accounting, the double-entry system dictates that every transaction affects at least two accounts: when you credit an asset account, it signifies a decrease in that asset. Likewise, when you credit an expense account, it indicates a decrease in expenses.

For example, if a company pays off a portion of its assets, such as reducing cash or inventory, a credit entry is applied to those respective accounts. On the other hand, if a company decreases expenses, such as reducing operating costs, a credit to the expense account reflects that reduction.

In summary, credits decrease asset accounts and expense accounts and increase liability and equity accounts.

Question

A credit is used to record a decrease in asset accounts and expense accounts. In accounting, the double-entry system dictates that every transaction affects at least two accounts: when you credit an asset account, it signifies a decrease in that asset. Likewise, when you credit an expense account, it indicates a decrease in expenses.

For example, if a company pays off a portion of its assets, such as reducing cash or inventory, a credit entry is applied to those respective accounts. On the other hand, if a company decreases expenses, such as reducing operating costs, a credit to the expense account reflects that reduction.

In summary, credits decrease asset accounts and expense accounts and increase liability and equity accounts.

Knowee AI · Accepted Answer

A credit is used to record a decrease in asset accounts and expense accounts. In accounting, the double-entry system dictates that every transaction affects at least two accounts: when you credit an asset account, it signifies a decrease in that asset. Likewise, when you credit an expense account, it indicates a decrease in expenses.

For example, if a company pays off a portion of its assets, such as reducing cash or inventory, a credit entry is applied to those respective accounts. On the other hand, if a company decreases expenses, such as reducing operating costs, a credit to the expense account reflects that reduction.

In summary, credits decrease asset accounts and expense accounts and increase liability and equity accounts.

A credit is used to record a decrease in which of the following accounts?

Question

A credit is used to record a decrease in which of the following accounts?

Solution

Similar Questions

Upgrade your grade with Knowee