Which of the following best describes the effect of a debit entry in the general ledger for an asset account?

• A. It transfers the balance to a liability account.
• B. It increases the balance of the asset account.
• C. It has no effect on the asset account.
• D. It decreases the balance of the asset account.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the nature of a debit entry in accounting. In the double-entry accounting system, a debit entry is used to record increases in asset accounts and expense accounts, and decreases in liability accounts, equity accounts, and revenue accounts.
2. Step 2: Recall the classification of accounts. Asset accounts represent resources owned by the business, such as cash, accounts receivable, inventory, and equipment.
3. Step 3: Analyze the effect of a debit entry on an asset account. Since asset accounts increase with debit entries, a debit entry will add to the balance of the asset account.
4. Step 4: Eliminate incorrect options. A debit entry does not transfer the balance to a liability account, does not decrease the balance of the asset account, and does not have no effect on the asset account.
5. Step 5: Conclude that the correct description is: 'It increases the balance of the asset account.' This aligns with the fundamental principles of accounting.