A Revenue Account

question 4

Multiple Choice

A revenue account

• A)is increased with a debit.
• B)is not considered to be an item on the income statement.
• C)is reported on the balance sheet at the end of the accounting period.
• D)when offset with expenses ultimately leads to net income and an increase to retained earnings.

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Definitions:

Liquidation

The process of winding up a company's operations, selling off its assets to pay off debts, and distributing any remaining assets to shareholders.

Treasury Stock

Shares that were once a part of the outstanding shares of a company's stock but were later repurchased by the company and are now held in the company’s treasury.

Shareholders' Equity

The residual interest in the assets of a corporation that remains after deducting its liabilities, often referred to as stockholders' equity or owners equity.

Common Stock

A type of equity security that represents ownership in a corporation, granting holders a share of profits in the form of dividends and voting rights.