What Type of Account Is Increased with a Debit but Is

question 118

Multiple Choice

What type of account is increased with a debit but is a decrease to retained earnings?

• A) Liability
• B) Asset
• C) Revenue
• D) Expense

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Definitions:

Opportunity Cost

The expense associated with giving up the second-best choice in favor of opting for the preferred alternative in any decision-making process.

Production Possibilities Frontier

A graph that represents the highest possible production levels for two or more products, based on available inputs such as resources and labor.

Opportunity Costs

The cost of forgoing the next best alternative when making a decision, crucial in evaluating the true cost of any economic choice.

Law of Increasing Costs

An economic principle stating that as the production of one good increases, the opportunity cost of producing an additional unit of this good also increases, assuming all resources are fully utilized.