The Classification and Normal Balance of the Retained Earnings Account

question 56

Multiple Choice

The classification and normal balance of the retained earnings account is

• A)asset, debit.
• B)shareholders' equity, credit.
• C)revenues, credit.
• D)liability, debit.

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Definitions:

Full Cost Pricing

A pricing strategy where the price of a product is determined by adding a markup to its total production costs, including both direct and indirect costs.

Cost-Plus Pricing

A pricing strategy where the selling price is determined by adding a specific markup to a product's cost price.

Cost Behaviour

The way in which a cost reacts or changes when there is a change in the level of business activity.

Marginal Revenue

The additional income earned from selling one more unit of a good or service.