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    Accounting elements

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    The text describes the following accounting elements: assets, liabilities, owners' equity, capital stock, retained earnings, revenues, expenses, and dividends.

    Which of these elements are increased by a debit entry, and which are increased by a credit entry?

    Give a transaction for each item that would result in a net increase in its balance.

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    Solution Preview

    Hi there,

    Here are your answers:

    Assets - debit
    Transaction - you purchase inventory for your business. The entry would appear as follows:
    Debit: Inventory
    Credit Cash

    Liabilities - credit
    Transaction - you take out a student loan. The entry would appear as follows:
    Debit: Cash
    Credit: Student Loan

    OE - credit
    Transaction - you ...

    Solution Summary

    The expert examines the accounting elements for assets, liabilities and owners' equity.