Which of the Following Statements Is Correct

question 44

Multiple Choice

Which of the following statements is correct?

• A) Debits increase assets.
• B) Credits increase assets.
• C) Credits decrease liabilities.
• D) Debits decrease both liabilities and assets.

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Definitions:

Coupon Bond

A type of bond that pays the holder a fixed interest payment (coupon) at regular intervals until maturity.

Interest Basis

A method used to calculate interest payments, based on how the interest accrues over time.

Par Value

The face value of a bond or stock, representing the amount returned to the holder at maturity.

Common Stock

Equity ownership in a corporation, granting voting rights and a share in profits through dividends.