Which of the Following Statements Is TRUE

question 134

Multiple Choice

Which of the following statements is TRUE?

• A)Asset and liability accounts have a normal debit balance.
• B)To debit an account means to increase it.
• C)Contributed capital and retained earnings have a normal credit balance.
• D)To credit an account means to decrease it.

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Definitions:

Physical Inventory

A count of all inventory a business physically has in its possession at a specific point in time.

Income Statement

A financial statement that shows a company's revenues, expenses, and net income or loss over a specific period of time, providing insight into its profitability.

Inventory Turnover Ratio

A metric indicating how often a company sells and replaces its stock of goods during a particular period.

Days' Sales

A financial ratio that calculates the average time it takes for a company to convert its inventory into sales.