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In the journal, the terms "debit" and "credit" most precisely refer to which of the following?
AIncreases and decreases respectively
BGood news and bad news for cash
CThe left and the right money column
DMoney received and money owed
Answer & Solution
Correct answer: C. The left and the right money column
1. In the journal, the column heading Debit means "left" and Credit means "right."
2. The terms only indicate which money column an amount is entered in.
3. Debit does not always mean increase, so option A is wrong.
4. The terms are not tied to good or bad news, ruling out option B; nor to receipt versus owing, ruling out option D.
5. Therefore debit and credit mean the left and right columns.
_Source: Jonick, Principles of Financial Accounting (CC BY-SA 4.0), §1.3.1 "The Journal", p.13_
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