State BPA Fundamental Accounting Practice Exam

True or False: The "right side" of an account's structure is known as the credit side.

1. True

2. False

3. It varies by account type

4. Only for liabilities

The correct answer is: True

The statement is true; the "right side" of an account's structure is indeed referred to as the credit side. In accounting, each T-account is divided into two sides: the left side represents debits, while the right side represents credits. This fundamental structure applies broadly across all types of accounts, including assets, liabilities, and equity. Credits typically increase liabilities and equity accounts and decrease asset accounts. Understanding this structure is crucial for recording transactions accurately, as each financial activity will involve at least one debit and one credit entry. Clarifying this foundational concept helps in grasping more complex accounting principles, ensuring accurate financial statements and reports.