"All Debits Are Increases and All Credits Are Decreases

question 49

Essay

"All debits are increases and all credits are decreases." Is this a correct statement? Explain your answer.

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Definitions:

Net Income

The profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Net Sales

The revenue from goods or services sold by a company after deducting returns, allowances for damaged or missing goods, and discounts.

Depreciation

This refers to the accounting process of allocating the cost of tangible assets over their useful lives, representing how much of an asset's value has been used up over time.

Office Equipment

Tangible items that are used in an office setting for operational purposes, such as computers, desks, and printers.