Which of the Following Statements About Normal Account Balances Is

question 87

Multiple Choice

Which of the following statements about normal account balances is correct?

• A)Assets have debit balances and liabilities have credit balances.
• B)Assets and liabilities have credit balances.
• C)Assets have credit balances and liabilities have debit balances.
• D)Assets and liabilities have debit balances.

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Definitions:

Net Income

The ultimate earnings a company reports after all deductions, including taxes and expenses, from total income.

Average Common Stockholders' Equity

The average equity held by common shareholders, calculated typically over a year, representing the company's assets minus its liabilities attributable to common shareholders.

Prior Period Adjustment

Adjustments made to the financial statements of a prior period to correct errors or implement changes in accounting policy.

Retained Earnings Account

An equity account on the balance sheet that represents the accumulated net earnings not distributed to shareholders in the form of dividends.