What term is used to describe an increase in a company's resources?

What term is used to describe an increase in a company's resources?

• A. Credit
• B. Profit
• C. Debit
• D. Deficit

Answer: (C)

The term that describes an increase in a company's resources is "Credit." In accounting, a credit entry reflects the inflow of resources to an account, which can lead to an increase in assets or equity. When an organization receives additional resources (such as cash or inventory), this is recorded as a credit. Understanding the distinction between credits and debits is crucial for grasping financial transactions. Debits generally indicate outflows or decreases in resources, contrasting with credits which signify inflows or increases. Profit, while related to a company's financial success, represents earnings rather than a direct increase in resources. Deficit refers to a shortfall or negative balance, further affirming that it does not apply to an increase in resources.

The term that describes an increase in a company's resources is "Credit." In accounting, a credit entry reflects the inflow of resources to an account, which can lead to an increase in assets or equity. When an organization receives additional resources (such as cash or inventory), this is recorded as a credit.

Understanding the distinction between credits and debits is crucial for grasping financial transactions. Debits generally indicate outflows or decreases in resources, contrasting with credits which signify inflows or increases. Profit, while related to a company's financial success, represents earnings rather than a direct increase in resources. Deficit refers to a shortfall or negative balance, further affirming that it does not apply to an increase in resources.