Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 39 - No. 20)
What happens to the bank account when paying for interest charges?
Debit the bank account, expenses are increased.
Credit the bank account, expenses are increased.
Debit the bank account, expenses are decreased.
Credit the bank account, expenses are decreased.
Explanation
When interest is paid, the bank account is credited (reduced) and the expense account is debited (increased).
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