The Rules of Debit and Credit Require Increases to Be

question 102

Multiple Choice

The rules of debit and credit require increases to be posted to the:

• A) debit side.
• B) credit side.
• C) normal balance.
• D) None of these answers is correct.

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Definitions:

Financial Statement

A formal record of the financial activities and position of a business, person, or other entity, typically including the balance sheet, income statement, and cash flow statement.

Normal Balance

The usual balance side (debit or credit) of an account, determined by the type of account, which helps in maintaining the double-entry accounting system.

Temporary/Permanent

Refers to the nature of differences affecting financial reporting; temporary differences resolve over time, whereas permanent differences do not.

Principal Plus

A term indicating the original amount of investment or loan plus any accrued interest or profits.