The Basic Accounting Equation May Be Expanded to Include the Income

question 157

Multiple Choice

The basic accounting equation may be expanded to include the income statement effects of operating activities.Which of the statements below is correct regarding the expanded accounting equation?

• A)Expenses are increased by credits and revenues are increased by debits.
• B)Net Income increases the Common Stock account.
• C)Expenses are increased by debits and revenues are increased by credits.
• D)Retained Earnings is reduced by net income.

---

Definitions:

Show Attitude

The demonstration of one's feelings, beliefs, or disposition through verbal and non-verbal forms of expression.

Biased Manner

A way of acting or making decisions that is influenced by prejudices or partiality, rather than being fair or impartial.

Outgroup Members

Individuals who are perceived as not belonging to one's own group, often leading to biases or prejudgment against them due to perceived differences.

Attitude Polarization

The phenomenon where a disagreement becomes more extreme as the different parties consider evidence on the issue.