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 are obligations to transfer assets or provide services to others. Equity represents the residual interest in the assets of an entity after deducting its liabilities. Withdrawals are distributions of assets to the owner or owners of a business. Contributed capital represents the amount that shareholders have invested in a corporation in exchange for ownership.

Decreases in Retained Earnings That Represent Costs of Assets or Services