A debit is used to increase which of the following types of accounts?

• A. Liability accounts
• B. Asset accounts
• C. Revenue accounts
• D. Equity 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 transactions. A debit increases certain types of accounts while decreasing others. Similarly, a credit has the opposite effect.
2. Identify the types of accounts: The main types of accounts in financial accounting are assets, liabilities, equity, revenue, and expenses. Each type reacts differently to debits and credits.
3. Analyze the effect of a debit on asset accounts: Asset accounts represent resources owned by a company, such as cash, inventory, and equipment. Debits are used to increase asset accounts because they represent an inflow or acquisition of resources.
4. Compare the effect of a debit on other account types: Debits decrease liability accounts (obligations owed), equity accounts (owner's claims), and revenue accounts (income earned). This is because these accounts represent outflows or reductions in obligations or earnings.
5. Conclude that a debit is used to increase asset accounts: Based on the analysis, debits are specifically used to increase asset accounts, as they represent the addition of resources to the company.