Which of the Following Describes the Classification and Normal Balance

question 67

Multiple Choice

Which of the following describes the classification and normal balance of the fees earned account?

• A) an asset with a credit balance
• B) a liability with a credit balance
• C) an expense with a debit balance
• D) a revenue with a credit balance

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Definitions:

Inventory Shrinkage

The loss of products between the point of manufacture or purchase from suppliers and the point of sale, often due to theft, damage, or errors.

Adjusting Entry

A journal entry made at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Inventory

The complete stock of goods and raw materials a company maintains for purposes of resale or to be used in the creation of products.

Gross Method

An accounting method for recording purchases at the full invoice price without deducting any cash discounts.