Which of the Following Statements Is Correct

question 35

Multiple Choice

Which of the following statements is correct?

• A) The left side of a T-account is the credit side.
• B) Debits decrease asset and expense accounts, and increase liability, equity, and revenue accounts.
• C) The left side of a T-account is the debit side.
• D) Credits increase asset and expense accounts, and decrease liability, equity, and revenue accounts.
• E) In certain circumstances the total amount debited need not equal the total amount credited for a particular transaction.

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Definitions:

Accounts Payable

The amount of money a company owes its suppliers for goods and services purchased on credit.

Accounts Receivable

Financial dues from customers to a firm for goods or services that have been dispensed or availed but remain unpaid.

Inventory

An accounting term referring to goods and materials held by a business for the purpose of sale or production.

Net Present Value

A method used in capital budgeting to assess the profitability of an investment or project by calculating the difference between the present value of cash inflows and outflows.