"Debiting" an Account I.increases an Asset Account

question 4

Multiple Choice

"Debiting" an account
I.increases an asset account.
II.increases a liability account.
III.increases an equity account.

• A)I only
• B)II only
• C)I or II only
• D)II or III only

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Definitions:

Consignee

A person or company to whom goods are shipped for sale, who receives and sells the goods on behalf of the consignor.

Consignor

The consignor is the party that owns goods or merchandise and entrusts them to another party, known as the consignee, for the purpose of sale.

Installment Plan

A method of payment where goods are purchased and possessed immediately, but payment is divided over a specified period of time in equal amounts.

Economic Substance

A accounting concept that transactions must have a genuine economic impact beyond the mere legal form, determining their treatment for tax purposes.