Which of the following statements about revenues and expenses is correct?
A)Both revenues and expenses typically have credit balances.
B)Revenues and expenses are considered assets and liabilities,respectively.
C)Revenue is the same as cash.
D)Expenses decrease the amount of stockholders' equity.

Question

Quizplus · Accepted Answer

Revenues and expenses are subcategories of Retained Earnings,which is a stockholders' equity account.Revenues increase net income.Since stockholders' equity,which is on the right side of the accounting equation,is increased with credits,revenues are increased with credits.Expenses decrease net income,which decreases the stockholders' equity account Retained Earnings.As a result,expenses are increased with debits.

Which of the Following Statements About Revenues and Expenses Is