Final answer:
Credits in accounting can represent money received, such as when a company earns revenue from sales. However, credits can also indicate increases in liabilities or equity, meaning money owed or invested. Expenses debited, conversely, typically denote money spent.
Step-by-step explanation:
When we talk about credits in an accounting context, they can represent several financial transactions. One of the common misconceptions is that credits strictly mean money received, but that's not always the case. Credits in accounting can also indicate an increase in a liability or equity account, such as when money is owed or when new capital is invested in a company. For instance, when a company sells a product or service, the money earned from the sale is credited to its revenue account, increasing the company's assets. Conversely, expenses are debits, reflecting a decrease in assets or an increase in liabilities. When considering the options provided: 1) Money received applies to credits regarding revenue. 2) Money spent refers to expenses. 3) Money owed could represent a credit when it relates to liabilities. 4) Money invested could be a credit entry in the context of equity contributions.