Question on: JAMB Accounting - 2022
The correct posting in a double entry system of account when there is an increase in double assets, expenses, capital or liabilities is to debit
A
capital and debit liabilities
B
liabilities and credit assets
C
assets and credit capital
D
capital and credit assets
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Correct Option: D
In a double-entry system, every transaction affects at least two accounts. The basic accounting equation is: Assets = Liabilities + Owner's Equity (Capital).
* **Assets:** Resources owned by a business. When assets increase, they are debited.
* **Capital:** The owner's investment in the business. When capital increases, it is credited.
Therefore, an increase in assets and capital will have the following double-entry:
* Debit the asset account (to show the increase).
* Credit the capital account (to show the increase).
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