Which of the following statements is true of expenses?
A) Expenses increase equity, so an expense account's normal balance is a credit balance.
B) Expenses decrease equity, so an expense account's normal balance is a credit balance.
C) Expenses increase equity, so an expense account's normal balance is a debit balance.
D) Expenses decrease equity, so an expense account's normal balance is a debit balance.
Answer: D) Expenses decrease equity, so an expense account's normal balance is a debit balance.
You might also like to view...
On January 1, Year 1, Big Seats Furniture, Inc., issued $200,000 worth of 8% bonds at $200,000. Interest will be paid annually on December 31. Show the effect of the first interest payment on the accounting equation. What is asset?
A. (16,000) Cash B. (8,000) Interest Payable C. 0 No Effect D. 16,000 Interest Income E. 16,000 Cash F. (16,000) Interest Expense G. 216,000 Bonds Payable H. 200,000 Bonds Income
Leaving the hyperlink to your e-mail address active will help keep your résumé consistent in print color
Indicate whether the statement is true or false