Which of the following statements is correct?
A)Expense accounts result in decreases in net income and stockholders' equity and therefore have credit balances.
B)Revenue accounts result in increases in net income and stockholders' equity and therefore have debit balances.
C)Loss accounts result in decreases in net income and stockholders' equity and therefore have debit balances.
D)Gain accounts result in increases in net income and stockholders' equity and therefore have debit balances.

Question

Quizplus · Accepted Answer

Loss accounts decrease net income and stockholders' equity, reflecting the negative impact of losses on a company's financial position. These accounts have debit balances because they represent expenses or losses, which are recorded as debits in accounting.

Which of the Following Statements Is Correct