The Normal Balance of a Revenue Account Is a ________

question 117

Multiple Choice

The normal balance of a revenue account is a ________ because revenues increase ________.

• A) debit; assets
• B) debit; dividends
• C) credit; liabilities
• D) credit; shareholders' equity

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Definitions:

Net Operating Income

Earnings before interest and taxes (EBIT); a measure of a company's profitability from its regular, core operations.

Unit Variable Cost

The variable cost associated with producing one additional unit of product.

Net Operating Income

A company's revenue minus its direct and indirect operating expenses, excluding taxes and interest, reflecting the profitability of its core business activities.

Monthly Sales

The total revenue generated from the sale of goods or services within a month.