Which of the following statements is incorrect?
A) Expenses increase stockholders' equity.
B) Expenses have normal debit balances.
C) Expenses decrease stockholders' equity.
D) Expenses are a negative factor in the computation of net income.

Question

Quizplus · Accepted Answer

Expenses decrease stockholders' equity, not increase it. When expenses are incurred, they are recorded as debits to expense accounts, which in turn decreases the overall equity of the company.

Which of the Following Statements Is Incorrect