Which of the following is true of account groups and their natural balance?
A. Accounts may be associated with more than one account group.
B. Each account group has a natural balance.
C. An account decrease occurs on the same side of the account's natural balance.
D. An account increase occurs on the opposite side of the account's natural balance.
Answer (2)
The true statement is that each account group has a natural balance, where asset accounts have a debit balance while liability accounts have a credit balance. An account increases on the same side as its natural balance, while it decreases on the opposite side. This understanding is essential for accurate financial reporting. ;
The true statement is that each account group has a natural balance. In accounting, asset accounts typically have a debit balance while liability accounts have a credit balance. Hence, understanding these concepts is vital for accurate financial reporting.
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