BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -Cash is an asset account, so an increase is a debit and an increase in the common stock account is a credit.

Detailed explanation-2: -Debits increase asset or expense accounts and decrease liability, revenue or equity accounts. Credits do the reverse.

Detailed explanation-3: -These ending balances by account type can be referred to as the natural balance. Assets and expenses both increase with a debit and therefore have debit ending balances. Liabilities, equity, and revenue increase with a credit and therefore have credit ending balances.

Detailed explanation-4: -Debits increase the value of asset, expense and loss accounts. Credits increase the value of liability, equity, revenue and gain accounts. Debit and credit balances are used to prepare a company’s income statement, balance sheet and other financial documents.