In journal entries, which statement best describes a credit entry?

• A. It always represents cash received.
• B. It increases assets and expenses and decreases liabilities, equity, and revenues.
• C. It decreases assets and expenses and increases liabilities, equity, and revenues.
• D. It is recorded on the left side of a T-account.

Answer: (C)

Verified step by step guidance

1. Understand that in accounting, every transaction affects at least two accounts, with one account debited and another credited.
2. Recall the basic accounting equation: Assets = Liabilities + Equity, and how debits and credits affect these accounts.
3. Know that a debit entry is recorded on the left side of a T-account and generally increases assets and expenses while decreasing liabilities, equity, and revenues.
4. Recognize that a credit entry is recorded on the right side of a T-account and generally decreases assets and expenses while increasing liabilities, equity, and revenues.
5. Therefore, the statement that best describes a credit entry is that it decreases assets and expenses and increases liabilities, equity, and revenues.