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Recording of Transactions - 1 — Account STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceAccountRecording of Transactions - 11 Mark
Question
Increase in a Liability Account is recorded on its credit side. Give reason.
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Answer

Liability is a Personal Account and thus the rule applicable is 'Debit the receiver, Credit the giver'. Increase in Liability (suppose creditor) means that he has given goods or some other benefit. Hence Liability is credited.

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