Which of the following statements is not true?
A) Expenses increase shareholders' equity.
B) Expenses have normal debit balances.
C) Expenses decrease shareholders' equity.
D) Expenses are a negative factor in the calculation of net income.

Question

Quizplus · Accepted Answer

Expenses decrease shareholders' equity because they reduce net income, which in turn reduces retained earnings, a component of shareholders' equity.

Which of the Following Statements Is Not True