A Transaction That Includes a Debit to an Expense and a Credit

question 165

Multiple Choice

A transaction that includes a debit to an expense and a credit to a liability indicates that:

• A) revenues increased.
• B) expenses increased.
• C) liabilities decreased.
• D) cash decreased.

---

Definitions:

Income Elasticity

A measure of how much the demand for a good or service changes in response to a change in consumers' income.

Inferior Good

A type of good for which demand decreases as the income of consumers increases, conversely, demand increases when consumer income decreases.

Cross Elasticity

Cross elasticity of demand quantifies how the demand for a good or service is affected by the price change of another related good, reflecting their substitutability or complementarity.

Complements

Goods or services that are used together, where the use of one increases the demand for the other.