A Credit Entry

question 211

Multiple Choice

A credit entry:

• A) Is recorded on the left side of a T-account.
• B) Is always a decrease in an account.
• C) Increases asset and expense accounts, and decreases liability, owner's capital, and revenue accounts.
• D) Is always an increase in an account.
• E) Decreases asset and expense accounts, and increases liability, owner's capital, and revenue accounts.

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Definitions:

Capital Investment

The expenditure of funds by a firm to acquire physical assets, such as property, plant, or equipment, to improve its long-term income and profitability.

Net Present Value Method

A method of analysis of proposed capital investments that subtracts the amount to be invested from the present value of the cash flows expected from the investments.

Cash Payback Method

A capital budgeting technique that calculates the time required to recoup the cost of an investment based on its expected cash flows.

Capital Investment

Funding provided to a business entity to purchase physical assets, like equipment or buildings, or to use in operations to stimulate growth.