SAP Financial Accounting (SAP FI) Practice Exam

In accounting, assets can indeed be both debited and credited, depending on the nature of the transaction involved. When an asset account increases, it is debited. Conversely, when an asset account decreases, it is credited. This dual nature reflects the fundamental principles of double-entry accounting, where every financial transaction has two sides.

For example, if a company purchases equipment, the asset account for equipment increases, resulting in a debit to that account. Alternatively, if the company sells some of its equipment, the asset account decreases, leading to a credit.

This is vital for maintaining the balance in the accounting equation (Assets = Liabilities + Equity), as each transaction affects at least two accounts, ensuring that the accounting records remain accurate and balanced. Understanding this concept is crucial for anyone involved in financial accounting, as it forms the foundation for recording transactions and managing financial statements effectively.