Asked by Garrett Jones on Jun 04, 2024
Verified
Which of the following rules is incorrect?
A) The accounting equation must always remain in balance.
B) Asset accounts are increased by debit entries and decreased by credit entries.
C) Expense accounts normally have debit balances.
D) Capital stock accounts are increased by debit entries and decreased by credit entries.
Accounting Equation
The basic principle underlying accounting that asserts that Assets = Liabilities + Equity, illustrating the balance among what a company owns and owes at any point in time.
Asset Accounts
Accounts that record the resources owned or controlled by a company that have future economic value.
- Recognize the process and importance of posting from journals to ledgers and preparing trial balances.
- Discern errors that are detectable by a trial balance and acknowledge the shortcomings of a trial balance in uncovering inaccuracies.
Verified Answer
MP
Malinda PandukaJun 07, 2024
Final Answer :
D
Explanation :
Capital stock accounts are increased by credit entries and decreased by debit entries.
Learning Objectives
- Recognize the process and importance of posting from journals to ledgers and preparing trial balances.
- Discern errors that are detectable by a trial balance and acknowledge the shortcomings of a trial balance in uncovering inaccuracies.
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