Liability Accounts Are Increased

question 23

Multiple Choice

Liability accounts are increased

• A) By debits
• B) By credits
• C) On the left side
• D) Below the balance line

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Definitions:

Cost Behavior

The manner in which a cost changes as the related activity level changes, categorized into fixed, variable, and mixed costs.

Opportunity Cost

The potential benefit that is given up when one alternative is selected over another.

Manufacturing Company

A business entity engaged in the transformation of raw materials into finished goods for sale by using labor, machines, and chemical or biological processing.

Contribution Margin

The amount by which sales revenue exceeds variable costs; it contributes to covering fixed costs and generating profit.