Question

Identify which of the following statements are true. (Select all that apply.) Multiple select question. Liabilities are on the right side of the accounting equation and have normal credit balances. Credits increase liabilities. Credits increase assets. Credits increase stockholders' equity. Assets are on the left side of the accounting equation and have a normal debit balance.

Answer 1

The true statements from the options are:

• Liabilities are on the right side of the accounting equation and have normal credit balances.
• Credits increase liabilities.
• Credits increase stockholders' equity.
• Assets are on the left side of the accounting equation and have a normal debit balance.

The Accounting Equation

Comprises of assets on the left and these have a debit balance. When assets are increased they are debited.

The right side contains both liabilities and stockholders' equity. Both of these have a normal credit balance and they increase when they are credited.

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