Which of the Following Is Correct

question 57

Multiple Choice

Which of the following is correct?

• A) Debit is the normal balance of the accounts payable account.
• B) Credit is the normal balance of the accounts receivable account.
• C) Debit is the normal balance of the Income from Services account.
• D) Debit is the normal balance of the Drawing account.

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Definitions:

Operating Activities

Transactions and events related to the core business functions, including revenue and expense activities that affect net income on the income statement.

Direct Method

A method for creating the cash flow statement by directly listing the actual cash flows associated with operating activities.

Operating Activities

Business actions that are involved in the day-to-day functions of producing goods, offering services, and other core operations.

Direct Method

A way of allocating service department costs directly to production departments without any consideration for services rendered between service departments.