Which of the Following Statements Is True Regarding Debits and Credits

question 56

Multiple Choice

Which of the following statements is true regarding debits and credits?

• A) On the income statement, debits are used to increase account balances, whereas on the statement of financial position, credits are used to increase account balances.
• B) Before adjustments, debits will not equal credits in the trial balance.
• C) The rules for debit and credit and the normal balance of Share Capital-Ordinary are the same as for liabilities.
• D) On the income statement, revenues are increased by debit whereas on the statement of financial position retained earnings is increased by a credit.

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Definitions:

Needs Contract

A contract or agreement tailored to address and fulfill specific needs of the parties involved.

Good Faith

Acting with honest intentions without seeking to take unfair advantage in a transaction or situation.

Rule Of Requirements

A principle in contract law that dictates a seller must supply only the quantity of goods that a buyer requires, no less and no more.

Triple

Multiplication by three or having three parts; in some contexts, it may refer to a rating, niveau, or layer that is three times stronger, higher, or more intense.