A Credit to a Liability Account

question 27

Multiple Choice

A credit to a liability account

• A) indicates an increase in the amount owed to creditors.
• B) indicates a decrease in the amount owed to creditors.
• C) is an error.
• D) must be accompanied by a debit to an asset account.

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Definitions:

Retail Prices

The price at which goods and services are sold to the final consumer for personal use.

Mark-ups

Additional charges applied to the cost of products to accommodate for overhead costs and profit margins.

Cost

The cost is the value exchanged, often monetary, to acquire goods or services, encompassing expenses such as purchase price, production, and overheads.

Selling Price

The amount of money for which a product or service is sold, which can include costs and profit margins.