Which of the Following Is True

question 51

Multiple Choice

Which of the following is true?

• A) Prepaid expenses are increased by a credit.
• B) Gains are increased by a debit.
• C) Losses are increased by a credit.
• D) Accumulated depreciation is increased by a credit.

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Definitions:

Accounts Receivable

Money owed to a business by its clients or customers for goods or services delivered or used but not yet paid for.

Aging

A method used to categorize accounts receivable based on the length of time an invoice has been outstanding, helping businesses to manage and collect debts effectively.

Adjusting Entry

A journal entry made at the end of an accounting period to record revenues and expenses in the correct period.

Bad Debt Expense

The portion of receivables that is estimated to be uncollectible, recognized as an expense in the income statement.