1 Assets and liabilities increase by respectively debit and

1. Assets and liabilities increase by __________ respectively.

debit and debit

credit and credit

debit and credit

credit and debit

c

2. Assets and owner’s equity decrease by __________ respectively.

debit and debit

credit and credit

debit and credit

credit and debit

3. Revenue and expenses increase by __________ respectively.

debit and debit

credit and credit

debit and credit

credit and debit

Solution

^{An asset is an economic resource having future economic value to the company .On the other hand liabilities are obligations that have to be paid for by the company in the future period.}

^{Examples of assets are fixed assets(such as pland and equipment),current assets(such as accounts receivable etc) while examples of liabilities are accounts payable,creditors etc.}

^{Hence an increase in assets is a debit while increase in liabiltiies is a credit.}

^{Owners equity consists of common stock;reserves and surplus etc.Hence an increase in owners equity would be a credit to the company.}

^{1.The correct option is C.}

2The correct option is D.

3.Revenues increase the net income for the period(such as sales revenues etc) while expenses decrease the net income(such as advertisement expennse,insurance expense,payment of wages etc).

Hence the correct option is D.