What do you mean by debit?

An increase in asset

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An increase in liability

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A decrease in asset

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An increase in proprietor's equity

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Solution

The correct option is B An increase in asset
The accounting equation means assets equals liabilities plus equity. It is the base of double entry system of accounting. Assets and expenses both are having debit balance. Assets is a permanent account in the business and expense are a temporary sub account of equity.
Hence, debit will increase assets.

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Similar questions

Give an example for each of the following types of transaction.
(i) Increase in one asset, decrease in another asset.
(ii) Increase in asset, increase in liability.
(iii) Increase in asset, increase in owner's capital.
(iv) Decrease in asset, decrease in liability.
(v) Decrease in asset, decrease in owner's capital.
(vi) Decrease in liabilities, increase in owner's capital.
(vii) Increase in one liability, decrease in another liability.
(viii) Increase in liabilities, decrease in owner's capital.

Q. Give one example of each of the following transactions:
(i) Increase in an asset and a liability.
(ii) Decrease in an asset and a liability.
(iii) Increase in assets and capital.
(iv) Decrease in assets and capital.

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Q. If assets are increased by 2,000 and liabilities are increased by 1,200. What will be the effect on business equity?

Which receipts of government budget are referred to when there is neither the increase in liability nor the decrease in assets?

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