Which of the Following Is Not a Correct Rule of Debits

question 205

Multiple Choice

Which of the following is not a correct rule of debits and credits?

• A) assets, expenses, and dividends are increased by debits
• B) assets are decreased by credits and have a normal debit balance
• C) liabilities, revenues, and retained earnings are increased by credits
• D) the normal balance for revenues and expenses is a credit

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Definitions:

Overhead Costing Accuracy

The degree to which allocated overhead costs accurately represent the actual expenses incurred by the production process or specific products.

Plantwide Overhead Rate

An overhead allocation rate used throughout an entire plant or company to allocate indirect costs to products.

Overhead Allocation Base

A measure used to distribute overhead costs among various products or service units within a business.

Machine Hours

A measure of the amount of time machines are operated in the production process, commonly used as an allocation base for assigning overhead costs.