Which statement about debits and credits is true?

Which statement about debits and credits is true?

• A. Debits decrease asset accounts
• B. Credits increase asset accounts
• C. Debits increase asset and expense accounts
• D. Credits decrease expenses

Answer: (C)

In double-entry accounting, each account has a normal balance and debits and credits move those balances in specific directions. Assets and expenses carry a debit balance, so increasing an asset or an expense is done with a debit. That makes the statement "Debits increase asset and expense accounts" true, because a single debit entry can raise both asset and expense balances when applicable. The other ideas don’t fit because debits do not decrease asset accounts (they increase them), and credits do not increase asset accounts (they decrease them). While it’s true that credits can decrease expenses, that description doesn’t capture the broader, consistent rule about how debits affect assets and expenses together, which is why the statement about debits increasing both asset and expense accounts is the best fit.

In double-entry accounting, each account has a normal balance and debits and credits move those balances in specific directions. Assets and expenses carry a debit balance, so increasing an asset or an expense is done with a debit. That makes the statement "Debits increase asset and expense accounts" true, because a single debit entry can raise both asset and expense balances when applicable.

The other ideas don’t fit because debits do not decrease asset accounts (they increase them), and credits do not increase asset accounts (they decrease them). While it’s true that credits can decrease expenses, that description doesn’t capture the broader, consistent rule about how debits affect assets and expenses together, which is why the statement about debits increasing both asset and expense accounts is the best fit.