Which account increases with a debit and is an asset?

Which account increases with a debit and is an asset?

• A. Cash
• B. Accounts Payable
• C. Service Revenue
• D. Utilities Expense

Answer: (A)

The key idea is that assets have a normal debit balance, so debiting increases them. Cash is an asset, and when you increase the cash balance, you debit Cash. The other options aren’t assets or don’t increase with a debit: Accounts Payable is a liability and increases with a credit; Service Revenue is a revenue and increases with a credit; Utilities Expense is an expense and increases with a debit but it is not an asset. So Cash is the account that both increases with a debit and is an asset.

The key idea is that assets have a normal debit balance, so debiting increases them. Cash is an asset, and when you increase the cash balance, you debit Cash. The other options aren’t assets or don’t increase with a debit: Accounts Payable is a liability and increases with a credit; Service Revenue is a revenue and increases with a credit; Utilities Expense is an expense and increases with a debit but it is not an asset. So Cash is the account that both increases with a debit and is an asset.