Which of the Following Is True Regarding Normal Balances of Accounts

question 101

Multiple Choice

Which of the following is true regarding normal balances of accounts?

• A) All accounts have a normal debit balance.
• B) The normal balance of all accounts will have either a positive or negative balance.
• C) Accounts that have a normal debit balance will only have debit entries, never credit entries.
• D) The normal balance is the side of the account that increases the account.

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Definitions:

Relatively Inelastic

This term describes a situation where the demand for a good or service changes by a smaller percentage than the changes in price, indicating that consumers are less sensitive to price changes.

Total Revenue

The total income generated by a company from its business activities, calculated as the unit price multiplied by the number of units sold.

Kinked-demand Curve Model

An economic model that suggests prices in an oligopoly are stable because firms will match price decreases but not price increases by competitors.