Which of the Following Statements Is True

question 9

Multiple Choice

Which of the following statements is true?

• A)Debits increase assets and increase liabilities.
• B)Credits decrease assets and decrease liabilities.
• C)Credits decrease assets and increase liabilities.
• D)Debits increase liabilities and decrease assets.

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable costs have been deducted, indicating how much contributes to covering fixed costs and generating profit.

Constrained Resources

Resources that limit the company's ability to produce goods or services, often resulting in bottlenecks in the production process.

Opportunity Cost

The benefit, profit, or value of something that must be given up to acquire or achieve something else.

Make or Buy Decision

The process of deciding whether to produce a good or service in-house or to purchase it from an external supplier.