In which of the following types of accounts are decreases recorded by debits?

• A. Asset accounts
• B. Liability accounts
• C. Expense accounts
• D. Dividend accounts

Answer: (B)

Verified step by step guidance

1. Understand the concept of debits and credits: In accounting, debits and credits are used to record changes in accounts. Debits typically increase asset and expense accounts, while they decrease liability, equity, and revenue accounts.
2. Analyze the question: The problem asks which type of account records decreases with debits. This means we are looking for accounts where a debit entry reduces the account balance.
3. Review the account types: Asset accounts increase with debits and decrease with credits. Liability accounts decrease with debits and increase with credits. Expense accounts increase with debits and decrease with credits. Dividend accounts increase with debits and decrease with credits.
4. Focus on liability accounts: Liability accounts are the only type of account listed where decreases are recorded by debits. This is because liabilities represent obligations, and reducing them requires a debit entry.
5. Conclude the reasoning: Based on the analysis, liability accounts are the correct answer because decreases in liabilities are recorded by debits.