All Liability Accounts Have Credit Balances

question 8

Multiple Choice

All liability accounts have credit balances.The accounts receivable account is a liability account.Therefore,the accounts receivable account has a credit balance.Which of the following statements is correct with respect to the above argument?

• A) The argument follows a logical and clear reasoning.
• B) The argument is illogical.
• C) The conclusion reached is clearly true.
• D) The classification of accounts receivable is consistent with the observed classification of receivables.

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Definitions:

Services

Intangible activities or benefits that are typically provided to satisfy the needs or wants of consumers or businesses.

Goods

Tangible products or items that satisfy human wants or needs and can be transferred from one person to another.

Product Market

The platform where end products or services are made available to individuals, companies, and the general public.

Households

Individuals or groups of people living together as a single unit, making economic decisions and consuming goods and services.