Which of the Following Is Not a Correct Rule of Debits

question 71

Multiple Choice

Which of the following is not a correct rule of debits and credits?

• A) Assets, expenses, and dividends are increased by debits.
• B) Assets are decreased by credits and have a normal debit balance.
• C) Liabilities, revenues, and stockholders' equity are increased by credits.
• D) The normal balance for revenues and expenses is a credit.

---

Definitions:

Implicit Marginal Tax Rate

The rate at which future benefits decrease as an individual’s income increases due to the phasing out of assistance or benefits.

Marginal Income Tax Rate

The rate at which the last dollar of a person's income is taxed, reflecting the incremental tax paid on incremental income.

Explicit Benefit-reduction Rate

The specified rate at which benefits decrease as income or other factors change, often related to welfare policies.

Incidence of Poverty

The proportion or rate of a population living below the poverty line, indicating the extent of poverty in a given area.