Debit and credit idea flashcards
Understanding debit and credit concepts is essential in accounting. These flashcards provide clear definitions and comparisons to help college students grasp these foundational ideas.
Quiz(8 vragen)
1. What does a debit entry typically do to an asset account?
Termen in deze set(19)
What is a debit?
A debit is an accounting entry that increases assets or expenses and decreases liabilities or equity.
What is a credit?
A credit is an accounting entry that increases liabilities or equity and decreases assets or expenses.
True or false: Debits always increase account balances.
False, because debits decrease liabilities and equity.
Difference between debit and credit?
Debits increase assets and expenses, while credits increase liabilities and equity.
Fill in the blank: A debit to an asset account does what?
Increases the asset's balance.
Fill in the blank: A credit to a liability account does what?
Increases the liability's balance.
What accounts are affected by a debit?
Assets and expenses.
What accounts are affected by a credit?
Liabilities and equity.
True or false: A debit can also reduce an asset.
True, if it is a contra asset account.
What do we call an account that typically has a debit balance?
Asset accounts usually have a debit balance.
Which of the following is a common debit account?
Cash is a common debit account.
Which of the following is a common credit account?
Accounts payable is a common credit account.
True or false: Revenue accounts are typically debited.
False, because revenue accounts are credited.
Debit entry effect on equity?
Decreases equity when expenses are debited.
Credit entry effect on assets?
Decreases asset balances when assets are credited.
What happens to total assets when liabilities increase?
Total assets remain unchanged; they balance each other.
Difference between a debit card and credit card?
A debit card withdraws from your bank balance, while a credit card borrows money.
Fill in the blank: Debits on the left side of the T-account represent __________.
increases in assets or expenses.
Fill in the blank: Credits on the right side of the T-account represent __________.
increases in liabilities or equity.
Vragen in deze set(8)
1. What does a debit entry typically do to an asset account?
2. Which type of account is reduced by a credit entry?
3. Which of the following statements is true?
4. What happens when both a debit and a credit entry occur?
5. Which account would typically be credited in a sale transaction?
6. Which of the following is NOT a characteristic of a debit?
7. In a typical journal entry, how are debits and credits recorded?
8. If you debit an expense account, what is the effect on the income statement?
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