An account records the ___________ in the balance of an item?
Correct answer: C. Increase or decrease
- A. Increase
- B. Decrease
- C. Increase or decrease
- D. Appreciation
Explanation
An account is maintained to record both increases and decreases in the balance of an item, such as cash, capital, or a liability. The debit and credit entries show these opposing changes.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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