Which type of stock entry is characterized by a credit entry indicating an increase?

The correct choice is that common stock is characterized by a credit entry indicating an increase. In accounting, when a company issues common stock, it increases its equity. This is recorded in the equity section of the balance sheet. The credit entry reflects an increase in ownership interest in the company, representing the funds raised from shareholders in exchange for shares. This increase in equity is essential for business operations and is fundamental to financial reporting.

Retained earnings is also involved in equity but is typically adjusted by debits and credits based on profits or losses and dividends declared. Dividends, on the other hand, represent a distribution of profits to shareholders and result in a reduction of retained earnings with a debit entry when declared. Revenue contributes to retained earnings as well but is not directly an equity account, while common stock directly impacts the capital contributions from shareholders. Thus, the nature of common stock as an account that increases with a credit makes it the correct choice.