Which group of accounts normally increases with credits?

• A. Assets
• B. Expenses
• C. Cash and Accounts
• D. Liabilities, Equity, and Revenue

Answer: (D)

The key idea is normal balances in double-entry accounting. Some accounts have a normal debit balance (assets and expenses), meaning debits increase them and credits decrease them. Others have a normal credit balance (liabilities, equity, and revenue), so credits increase them and debits decrease them. Because these three groups have credit as their normal increase side, they are the ones that typically rise when you record a credit.

Examples help solidify this: when you borrow money, the liability increases with a credit; when you earn revenue, the revenue account is increased with a credit (even though the cash or accounts receivable you receive to settle the sale is a debit to an asset). Owner contributions or other equity events also increase with credits, and revenue directly boosts equity through retained earnings. In contrast, assets and expenses are increased by debits, so they don’t fit as the group that normally increases with credits.