Which of the Following Accounts Follows the Rules of Debit

question 136

Multiple Choice

Which of the following accounts follows the rules of debit and credit in relation to increases and decreases in the opposite manner?

• A)Prepaid Insurance and Dividends
• B)Dividends and Interest Revenue
• C)Interest Payable and Common Stock
• D)Advertising Expense and Land

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Definitions:

Liabilities

Obligations in terms of finances that an organization must fulfill to external parties, involving the exchange of economic advantages like funds, goods, or assistance over time.

Accounts Receivable

Money owed to a company by its customers for goods or services provided on credit.

Capital

Represents the amount of funds provided by owners or investors to support business operations.

Owner's Equity

Owner's Equity is the total assets of an entity minus its total liabilities, representing the ownership interest in the company.