When Working with T Accounts,an Important Rule to Remember Is

question 81

Multiple Choice

When working with T accounts,an important rule to remember is:

• A)when an account is debited,an amount is entered on the right-hand side on the T account.
• B)an increase to accounts payable will be recorded as a debit.
• C)to credit an account means to enter an amount on the right-hand side of the T account.
• D)the debit side of a T account is on the right-hand side of the T account for assets and expenses.

---

Definitions:

Commercial Substance

An occurrence in a transaction that causes a significant change in cash flow, indicating that the transaction has economic consequences.

Net Income

The company's earnings post all deductions, including expenses and taxes, from its overall revenues.

Deferred Tax Liability

This is a tax obligation that a company owes but can pay at a future date due to timing differences between its financial accounting and tax filing.

Deferred Tax Asset

An accounting asset representing the amount of taxes payable in future periods due to deductible temporary differences and carryforwards.