Which of the Following Statements Is Not True

question 155

Multiple Choice

Which of the following statements is not true?

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

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Definitions:

Entry Price

The price at which a security or asset was bought, affecting the calculation of gains and losses for accounting or tax purposes.

Principal Market

The market with the greatest volume and level of activity for the asset.

Active Market

A market in which transactions for the asset or liability take place with sufficient frequency and volume to provide pricing information on an ongoing basis.

Non-performance Risk

Non-performance risk is the risk that a counterparty will not fulfil their contractual obligations, affecting the valuation of financial instruments.