Which of the Following Statements Regarding Accounts Is Incorrect

question 46

Multiple Choice

Which of the following statements regarding accounts is incorrect?

• A) Revenue is increased by a credit and an expense is increased by a debit.
• B) A liability is decreased by a debit and increased by a credit.
• C) Revenue is increased by a debit and an expense is increased by a credit.
• D) An asset is increased by a debit and decreased by a credit.

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Definitions:

Variable Expenses

Costs that change in proportion to the activity of a business.

Sales

Revenue generated from the sale of goods or services to customers.

Fixed Expenses

Costs that do not change in total regardless of changes in the volume of production or sales.

Operating Results

A summary of a company's financial performance over a specified period, focusing on revenue, expenses, and net income.