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.

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