A business that is profitable and liquid will have more accounts with credit balances than with debit balances.

Question

Quizplus · Accepted Answer

This statement is not necessarily true. A business may have more accounts with debit balances (such as inventory or equipment) than with credit balances (such as accounts payable or accrued expenses) and still be profitable and liquid. It depends on the nature of the business and its accounting practices.

A Business That Is Profitable and Liquid Will Have More