Which of the Following Statements Is True Regarding Debits and Credits

question 54

Multiple Choice

Which of the following statements is true regarding debits and credits?

• A) On the income statement, debits are used to increase account balances, whereas on the statement of financial position, credits are used to increase account balances.
• B) The basic equation on the statement of financial position is Assets + Liabilities = Equity.
• C) The rules for debit and credit and the normal balance of Share Capital-Ordinary are the same as for liabilities.
• D) On the income statement, revenues are increased by debits whereas on the statement of financial position retained earnings is increased by a credit.

Understand how an individual's life cycle affects their investment decisions and asset allocation.

Comprehend the steps involved in the process of asset allocation.

Recognize the impact of risk tolerance on investment decisions.

Grasp the concept of investment horizon and its importance in the investment process.

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Definitions:

Previous Round

Refers to the most recent stage of financing or investment a company underwent before the current one.

Terminal Value

The estimated value of a business or project at the end of a specific period, taking into account future cash flows in perpetuity.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from total revenue.

P/E Ratio

The Price-to-Earnings Ratio is a financial metric comparing a company's share price to its earnings per share, indicating the value that investors place on a company's earning ability.