Which of the Following Accounts Decreases with a Credit

question 15

Multiple Choice

Which of the following accounts decreases with a credit?

• A) Cash
• B) Capital
• C) Accounts payable
• D) Notes Payable

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Definitions:

Savings Function

A mathematical expression that depicts how savings vary with changes in income, usually stating that savings are a function of disposable income.

Induced Consumption

The portion of consumer spending that varies with changes in disposable income, suggesting that as people earn more, they spend more.

Autonomous Consumption

The level of consumption that occurs when income is zero, reflecting the basic level of consumption that does not vary with disposable income.

Disposable Income

Monetary provision for households to engage in saving and spending after the imposition of income taxes.