Which of the Following Statements Is True of Expenses

question 65

Multiple Choice

Which of the following statements is true of expenses?

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

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Definitions:

MU/P Ratio

The ratio of marginal utility (MU) to price (P), used to determine the optimal consumption point where consumer satisfaction per unit of cost is maximized.

Marginal Utility

The heightened benefit received from using one more unit of a good or service.

Marginal Utility Per Dollar

The additional satisfaction obtained from spending one more dollar on a good or service.