Decreases in equity that represent costs of providing products or services to customers,used to earn revenues are called:
A)Liabilities.
B)Equity.
C)Dividends.
D)Expenses.
E)Common Stock.

Question

Quizplus · Accepted Answer

Expenses are costs incurred by a company in order to generate revenue. As expenses are incurred, the company's equity decreases because it has less resources available. Expenses can include salaries, cost of goods sold, rent, utilities, and more. Options A, B, C, and E are not correct because they do not accurately describe costs of providing products or services to customers.

Decreases in Equity That Represent Costs of Providing Products or Services