Which of the Following Is Not a Correct Rule of Debits

question 71

Multiple Choice

Which of the following is not a correct rule of debits and credits?

• A) Assets, expenses, and dividends are increased by debits.
• B) Assets are decreased by credits and have a normal debit balance.
• C) Liabilities, revenues, and stockholders' equity are increased by credits.
• D) The normal balance for revenues and expenses is a credit.

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Definitions:

Industry Entry

The process of a new competitor or company beginning operations in a specific market or industry.

MR

Marginal Revenue, the additional income that is gained from selling one more unit of a product or service.

Profit-Maximizing

A strategy or approach aimed at achieving the highest possible profit from business operations.

Positive Profits

A financial gain that occurs when the revenues generated from business activities exceed the costs and expenses involved in operating the business.