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.

---

Definitions:

Baking Department

A specific section within a retail store, food service establishment, or manufacturing facility dedicated to producing baked goods.

Overhead Costs

General business expenses that are not directly attributable to creating a product or service but are necessary for the business's day-to-day operations.

Plantwide Overhead Rate

A single overhead rate calculated by dividing all manufacturing overhead costs by an entity's total allocation base, typically direct labor hours or machine hours, used across an entire factory.

Machine Hours

A measure of the total time that machines are operating, used in cost accounting to allocate machine-related expenses to products.