Which of the Following Statement About the Rules of Debits

question 88

Multiple Choice

Which of the following statement about the rules of debits and credits is correct?

• A) An asset is increased by a debit.
• B) Dividends are decreased by debits.
• C) A liability is increased by a debit.
• D) Revenue is increased by a debit.

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Definitions:

Profitability Index

A financial tool used to evaluate the desirability of an investment or project by dividing the present value of future cash flows by the initial investment.

Net Present Value

A calculation that determines the present value of future cash flows, discounted at a specific rate, to evaluate the profitability of an investment.

Investment Allowance

Investment allowance is a tax incentive that allows businesses to deduct a certain percentage of their investment in assets from their taxable income.

Operating Revenue

Income generated from a company's core business activities, excluding income from investments or secondary sources.