In Which of the Following Types of Accounts Are Increases

question 40

Multiple Choice

In which of the following types of accounts are increases recorded by credits?

• A) revenues, liabilities
• B) dividends, assets
• C) liabilities, dividends
• D) expenses, liabilities

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Definitions:

Cost Method

An accounting method used to value an investment at its original purchase cost, adjusted for dividends, stock splits, and stock dividends.

Intercompany Interest Revenues

Income earned by one entity within a corporate group for lending funds to another entity within the same group, typically eliminated during the consolidation process for financial reporting.

Interest Expense

The cost incurred by an entity for borrowed funds, including loans, bonds, or lines of credit.

Bond Premium

Bond Premium is the difference by which the price paid for a bond exceeds its face value, typically occurring when the bond's interest rate is higher than the current market rate.