Which of the Following Statements Regarding Credit Entries Is True

question 49

Multiple Choice

Which of the following statements regarding credit entries is true?

• A)Credits decrease liability accounts.
• B)Credits increase asset accounts.
• C)Credits increase the common stock account.
• D)Credits increase asset and common stock accounts,and decrease liability accounts.

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Definitions:

Selling Prices

The set price at which goods and services are sold to customers, determined by factors such as cost, competition, and demand.

Ending Inventory

The cost of merchandise ready to be sold at the close of an accounting cycle, found by taking the initial inventory, adding purchases, and subtracting the cost of goods sold.

Inventory Valuation

The method used to assign a monetary value to inventory, which affects the cost of goods sold and gross profit.

Weighted Average

A calculation that takes into account the varying degrees of importance of the numbers in a data set, often used in cost accounting.