Income and Expenses Affect the Profits Made by an Entity

Multiple Choice

Income and expenses affect the profits made by an entity. Which of the following statements best describes how this fact is consistent with the accounting equation and the debit and credit rule?

A) Income increases equity and so should be a debit and expenses decrease equity and so should be a credit.
B) Income increases equity and so should be a credit and expenses decrease equity and so should be a debit.
C) Income decreases equity and so should be a debit and expenses increase equity and so should be a credit.
D) Income and expenses both affect equity and so both should be a credit if they are increasing.