Which of the Following Best Describes Liabilities and Stockholders' Equity

question 120

Multiple Choice

Which of the following best describes liabilities and stockholders' equity?

• A)They are the sources of financing an entity's assets.
• B)They are the economic resources used by a business entity.
• C)They are reported on the income statement.
• D)They both increase when assets increase.

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Definitions:

T Accounts

T accounts are a visual aid in accounting to represent general ledger accounts, showing debits on the left side and credits on the right, to track financial transactions.

Direct Labour Cost

The total expense incurred by a company for the wages of the workforce directly involved in manufacturing or producing goods.

Sales Salaries Expense

The total cost associated with compensating the sales force, including wages, commissions, and bonuses.

Work in Process

An inventory category that refers to partially completed goods awaiting completion and sale, standing between raw material and finished goods inventory.