In journal entries, what does a debit to an asset account indicate?

• A. An increase in a liability account balance
• B. A decrease in an equity account balance
• C. A decrease in the asset account balance
• D. An increase in the asset account balance

Answer: (D)

Verified step by step guidance

1. Understand the basic accounting equation: \(\text{Assets} = \text{Liabilities} + \text{Equity}\). This equation is the foundation of double-entry accounting.
2. Recall that in double-entry accounting, every transaction affects at least two accounts, with debits and credits used to record these changes.
3. Know the normal balances of accounts: asset accounts normally have debit balances, while liability and equity accounts normally have credit balances.
4. Recognize that a debit entry to an asset account increases its balance, because assets have a normal debit balance.
5. Therefore, a debit to an asset account indicates an increase in the asset account balance, not a decrease or changes in liabilities or equity.