A transaction that includes a debit to an expense and a credit to a liability indicates that:
A)revenues increased.
B)expenses decreased.
C)liabilities increased.
D)liabilities decreased.

Question

Quizplus · Accepted Answer

A debit to an expense account means that the company incurred an expense, which would decrease its net income. On the other hand, a credit to a liability account means that the company owes more money to its creditors, which increases its liabilities. Therefore, option C is the correct answer.

A Transaction That Includes a Debit to an Expense and a Credit