If The Debit Portion Of An Adjusting Entry Is To An Asset Account, Then The Credit Portion Must Be To A Liability Account (True / False)

The Answer Is "False"

If the debit portion of an Adjusting Entry is to an Asset Account, then the credit portion must be a Liability is false as when we debit a Prepaid Expense Account or an Accrued Revenue Account as a Current Asset, then we credit an Expense Account or a Revenue Account.

The following adjusting entries in which the debit portion shows a Prepaid Expense Account or an Accrued Revenue Account and credit portion shows an Expense Account or a Revenue Account are shown below:

1.

                                  Prepaid Expense a/c  XXX

                                                                               Expense a/c XXX

                                                      (Expense Unexpired For The Period)

 

2.

                                       Accrued Revenue a/c  XXX

 

                                                                                   Revenue a/c  XXX

                                          (Accrued Revenue Earned But Not Received In Cash / Bank)aricle