A debit may signify a decrease in a liability account.
Accounts are generally divided into four heads namely asset, liability, income, and expenditure. An increase in assets and expenditure is debited whereas a decrease in the same is credited.
On the other hand, an increase in liability or income is credited and their decrease is debited.
A decrease in asset account therefore will lead to the credit of asset account. Retained earnings and dividends are the income of the entity and hence its increase will be credited.
Therefore the correct option is a. which says a debit signifies a decrease in a liability account.
Learn more about the rules for debit credit here:
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