Entering an amount on the left side of an account is known as what?

Entering an amount on the left side of an account is known as what?

• A. Increasing a revenue account
• B. Decreasing a liability account
• C. Debiting the account
• D. Crediting the account

Answer: (C)

Entering an amount on the left side of an account is referred to as debiting the account. In accounting, the left side of an account is traditionally associated with debits, while the right side is associated with credits. When you debit an account, you increase asset or expense accounts and decrease liability, revenue, or equity accounts depending on the account type. For instance, if you debit a cash account, you are increasing the amount of cash the company has. Conversely, if you debit an expense account, you are recording an expense that will reduce net income. Understanding this fundamental principle of debiting and crediting is essential for accurately maintaining financial records and analyzing financial statements.

Entering an amount on the left side of an account is referred to as debiting the account. In accounting, the left side of an account is traditionally associated with debits, while the right side is associated with credits. When you debit an account, you increase asset or expense accounts and decrease liability, revenue, or equity accounts depending on the account type.

For instance, if you debit a cash account, you are increasing the amount of cash the company has. Conversely, if you debit an expense account, you are recording an expense that will reduce net income. Understanding this fundamental principle of debiting and crediting is essential for accurately maintaining financial records and analyzing financial statements.