The Reason That Both Expenses and Dividends Are Recorded by Debit

question 122

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 equity.
• D) The statement is untrue-expenses are recorded by debits, but dividends are recorded by credits to the equity account.