Which of the Following Is a True Statement

question 40

Multiple Choice

Which of the following is a true statement?

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

---

Definitions:

Utilities Expense

Costs incurred by a business for basic utilities, such as electricity, water, and gas, necessary for operations.

Adjusting Entry

An accounting journal entry made at the end of an accounting period to update the accounts for accruals and deferrals that have not been recorded during the period.

Accounts Payable

This term signifies the amount of money a company owes to its suppliers or vendors for goods or services received but not yet paid for.

Accrue Expense

An accounting method where expenses are recognized when incurred but not yet paid, reflecting the economic reality of the expense.