Which of the Following Is Not a Correct Rule of Debits

question 56

Multiple Choice

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

• A) assets, expenses and withdrawals are increased by debits
• B) assets are decreased by credits and have a normal debit balance
• C) liabilities, revenues and owner's equity are increased by credits
• D) the normal balance for revenues and expenses is a credit

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Definitions:

Franchise Fee

The upfront payment a franchisee makes to a franchisor for the rights to use the franchisor's brand, system, and ongoing support.

Due Diligence Fee

A fee paid by a potential buyer to review a company's assets, liabilities, and operations before finalizing a purchase or investment.

Freedom and Creativity

The liberty to innovate or create without restrictions, often essential in artistic and entrepreneurial pursuits.

Major Disadvantage

A significant drawback or negative aspect associated with a decision, plan, or situation, potentially hindering success or satisfaction.