The Reason That Both Expenses and Dividends Are Recorded by Debit

question 90

Multiple Choice

The reason that both expenses and dividends are recorded by debit entries is that:

• A)All dividend and expense transactions involve offsetting credit entries to the Cash account.
• B)Both expenses and dividends are offset against revenues in the income statement.
• C)Both expenses and dividends reduce owners' equity.
• D)The statement is untrue-expenses are recorded by debits,but dividends are recorded by credits to the owners' equity account.

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Definitions:

Agent By Estoppel

A concept in law where a person is prevented (estopped) from denying the agency relationship due to their actions or representations.

Agent By Conduct

An individual or entity that acts on behalf of another party in a way that suggests they have the authority to do so, even if no formal agency relationship exists.

Grain Sellers

Individuals or companies engaged in the business of selling grains either wholesale or retail.

Soybeans

A type of legume native to East Asia, widely grown for its edible bean which has numerous uses, including oil, meal, and as a vegetable.