The Rules of Debit and Credit May Be Summarized as Follows

question 87

Multiple Choice

The rules of debit and credit may be summarized as follows:

• A) Accounts on the left side of the balance sheet are increased by debits, whereas, accounts on the right side of the balance sheet are increased by credits.
• B) The balance of a ledger account is increased by debit entries and is decreased by credit entries.
• C) Accounts on the left side of the balance sheet are increased by credits, whereas accounts on the right side of the balance sheet are increased by debits.
• D) The balance of a ledger account is increased by credit entries and is decreased by debit entries.

---

Definitions:

Activity Rate

A measure used in activity-based costing to assign costs to activities based on their use of resources.

Batch Setup

The process of preparing equipment and machinery for a specific batch of production, including configuration and adjustments.

Activity Cost Pools

A method in cost accounting where costs are accumulated according to activities performed, facilitating more accurate product or service costing.

Activity-based Costing System

A method of allocating costs to products or services based on the activities that go into producing them.