Which of the Following Statements Is not True

question 64

Multiple Choice

Which of the following statements is not true?

• A)Expenses increase stockholders' equity.
• B)Expenses have normal debit balances.
• C)Expenses decrease stockholders' equity.
• D)Expenses are a negative factor in the computation of net income.

Understand the difference between internal and external transactions and their recording.

Be familiar with the process of identification and recording in accounting.

Identify internal and external users of accounting data and their needs.

Understand the services provided by public and private accountants.

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Definitions:

Budgeted Profit and Loss Statement

A financial statement forecasting the revenue, expenses, and profit for a future period, based on management's estimates.

Operating Expenses

Ongoing expenses for operating a business, excluding the cost of goods sold but including costs like rent, utilities, and payroll.

Budgetary Slack

The practice of underestimating revenues or overestimating costs when preparing a budget, to create a buffer that makes budget targets easier to achieve.

Revenue Projection

An estimate of the future sales and income generated by a company during a specific period, often used in budgeting and planning.