A Knowledge of the Normal Balances of Accounts Would Help

question 80

Multiple Choice

A knowledge of the normal balances of accounts would help you spot which of the following as an error in recording?

• A)A debit balance in the dividends account
• B)A credit balance in an expense account
• C)A credit balance in a liabilities account
• D)A credit balance in a revenue account

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Definitions:

Competitive Firm

A company that operates in a market where there is free entry and exit and no single buyer or seller can influence the market price.

Total Revenue

refers to the full amount of income generated by the sale of goods or services before any expenses are subtracted.

Sinking Fund

A savings account or fund dedicated to paying off debt or a bond, where money is set aside over time to manage future repayment obligations.

Depreciating Equipment

Equipment or machinery that decreases in value over time due to use, wear and tear, or obsolescence.