In journal entries using the double-entry system, a credit may signify a(n):

• A. Increase in a liability account
• B. Decrease in a revenue account
• C. Decrease in an asset account
• D. Increase in an expense account

Answer: (A)

Verified step by step guidance

1. Understand the double-entry accounting system, where every transaction affects at least two accounts: one debit and one credit.
2. Recall the normal balances of different types of accounts: assets and expenses normally have debit balances, while liabilities, equity, and revenue normally have credit balances.
3. Recognize that a credit entry increases accounts with a normal credit balance (liabilities, equity, revenue) and decreases accounts with a normal debit balance (assets, expenses).
4. Analyze each option by matching it with the effect of a credit: for example, a credit increases a liability account, decreases an asset account, decreases an expense account, and increases a revenue account.
5. Conclude that a credit signifies an increase in a liability account, a decrease in an asset account, and a decrease in an expense account, but not a decrease in a revenue account.