Decreases in retained earnings that represent costs of assets or services that are used to earn revenues are called:
A)Liabilities
B)Equity
C)Withdrawals
D)Expenses
E)Contributed capital

Question

Quizplus · Accepted Answer

Expenses are decreases in retained earnings that represent costs of assets or services that are used to earn revenues. Liabilities represent amounts owed to creditors, equity represents ownership interest in the company, withdrawals represent distributions of company assets to owners, and contributed capital represents funds contributed by owners in exchange for ownership interest.

Decreases in Retained Earnings That Represent Costs of Assets or Services