Problem

Debit/credit  rulesMatt, Allison, and Sarah, three accounting students, were discussing th...

Debit/credit  rules

Matt, Allison, and Sarah, three accounting students, were discussing the rules of debits and credits. Matt says that debits increase account balances and credits decrease account balances. Allison says that Matt is wrong, that credits increase account balances and debits decrease account balances. Sarah interrupts and declares that they are both correct.

Required

Explain what Sarah meant and give examples of transactions where debits increase account balances, credits decrease account balances, credits increase account balances, and debits decrease account balances.

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