The reason that both expenses and dividends are recorded by debit entries is that:
A)All dividend and expense transactions involve offsetting credit entries to the Cash account.
B)Both expenses and dividends are offset against revenues in the income statement.
C)Both expenses and dividends reduce owners' equity.
D)The statement is untrue-expenses are recorded by debits,but dividends are recorded by credits to the owners' equity account.

Question

Quizplus · Accepted Answer

Both expenses and dividends reduce owners' equity, which is a credit balance account. Therefore, to record these transactions, a debit entry is needed to decrease the balance of owners' equity.

The Reason That Both Expenses and Dividends Are Recorded by Debit