Liabilities Are Established with Debits and Eliminated with Credits

question 154

True/False

Liabilities are established with debits and eliminated with credits.

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Definitions:

Debits

An entry recorded on the left side of a double-entry bookkeeping system that increases asset and expense accounts, and decreases liability, equity, and revenue accounts.

Journal

A chronological record of all the financial transactions of a business, used for the process of accounting.

Indenting

The process of setting text inwards from the margin to separate sections or emphasize parts of a document.

Capital

Assets with monetary value, including cash and merchandise, that a company utilizes to produce revenue or increase its wealth.