Entries to the left side of an account are referred to as credits, while entries to the right side of an account are debits.

• A. True
• B. False
• C. Debits are added to liabilities
• D. Credits decrease assets

Answer: (B)

In double-entry accounting, the left side of an account is the debit side and the right side is the credit side. Debits and credits balance every transaction, and the effect depends on the account type: assets and expenses typically increase with a debit and decrease with a credit, while liabilities, equity, and revenue typically increase with a credit and decrease with a debit. So the statement is false because entries on the left are debits, not credits, and the right side is where credits belong. For example, recording a liability increases with a credit, not a debit, and recording an asset purchase increases the asset with a debit.