On which side of an account are increases recorded for asset accounts?

• A. Both sides
• B. Credit side
• C. Debit side
• D. Neither side

Answer: (C)

Verified step by step guidance

1. Understand the basic accounting principle: Increases in asset accounts are recorded on the debit side. This is because assets are part of the accounting equation (Assets = Liabilities + Equity), and debits represent increases in assets.
2. Review the structure of a T-account. A T-account has two sides: the left side is the debit side, and the right side is the credit side. For asset accounts, increases are recorded on the left (debit) side.
3. Recall the rules of debits and credits: Debits increase asset accounts, while credits decrease them. This is a fundamental rule in double-entry accounting.
4. Consider examples of asset accounts, such as Cash, Accounts Receivable, or Equipment. When these accounts increase (e.g., receiving cash or purchasing equipment), the increase is recorded as a debit.
5. Apply this knowledge to the question: The correct answer is 'Debit side,' as increases in asset accounts are always recorded on the debit side according to accounting principles.