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In what order are transactions recorded in a journal?
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2. Transaction Analysis
Journal Entries: Debits and Credits
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Which side of the account increases the Cash account?
A
Both sides
B
Neither side
C
Credit
D
Debit
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Understand the nature of the Cash account: Cash is an asset account, and asset accounts typically increase on the debit side and decrease on the credit side.
Recall the basic accounting equation: Assets = Liabilities + Equity. Assets are recorded on the left side of the equation, which corresponds to the debit side in accounting entries.
Review the rules of debits and credits: For asset accounts like Cash, debits increase the account balance, while credits decrease it.
Consider the question: It asks which side increases the Cash account. Based on the rules, the debit side increases the Cash account.
Conclude that the correct answer is 'Debit' because debits increase the balance of asset accounts such as Cash.
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