Which of the Following Describes the Classification and Normal Balance

question 3

Multiple Choice

Which of the following describes the classification and normal balance of the Retained Earnings account?

• A)Asset, debit
• B)Stockholders' equity, credit
• C)Revenues, credit
• D)Expense, debit

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Definitions:

Deadweight Loss

A shortfall in economic optimization that occurs when the balance for a good or service is missed or impossible to hit.

Tax

A compulsory financial charge or levy imposed by a government on individuals or entities to fund public expenditure.

Consumer Surplus

The difference between the aggregate willingness to pay by consumers for a good or service and the aggregate actual payment.

Deadweight Loss

An economic inefficiency caused by a disruption in market equilibrium, leading to a loss of societal welfare.