Which of the Following Statements Is True of Expenses

question 131

Multiple Choice

Which of the following statements is true of expenses?

• A)Expenses increase owner's equity, so an expense account's normal balance is a credit balance.
• B)Expenses decrease owner's equity, so an expense account's normal balance is a credit balance.
• C)Expenses increase owner's equity, so an expense account's normal balance is a debit balance.
• D)Expenses decrease owner's equity, so an expense account's normal balance is a debit balance.

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Definitions:

Differentiate

To distinguish a product, service, or brand from competitors by emphasizing unique features or benefits.

Cash Expenditure

The actual outflow of cash or cash equivalents by a company, typically for operating expenses, investments, or acquisitions.

Taxes

Compulsory financial charges or some other type of levy imposed upon a taxpayer by a governmental organization in order to fund government spending and various public expenditures.

Demand Curve

A graphical representation of the relationship between the price of a good or service and the quantity demanded for a given period, typically showing a downward slope from left to right.