Which of the following statements about revenues and expenses is correct?
A)Credits increase both revenues and expenses.
B)Credits increase expenses and decrease revenues.
C)Credits increase revenues and decrease expenses.
D)Credits decrease both revenues and expenses.

Question

Quizplus · Accepted Answer

Revenues increase net income,which increases the stockholders' equity account Retained Earnings.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