Which of the Following Does Not Correctly Describe an Adjusting

question 98

Multiple Choice

Which of the following does not correctly describe an adjusting journal entry that debits interest expense and credits interest payable?

• A)The entry increases expenses and decreases retained earnings.
• B)The entry decreases net income and decreases stockholders' equity.
• C)The entry increases expenses and increases liabilities.
• D)The entry decreases assets and decreases stockholders' equity.

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Definitions:

Total Dividend Payment

The sum of all dividends a company pays out to its shareholders over a specific period.

Stock Split

A stock split is a corporate action that increases the number of a company's shares by dividing each share, which can make the stock more affordable to investors.

Total Market Value

The combined market price or value of all of a company's outstanding shares, reflecting its overall market capitalization.

Post-Split Price

The new stock price following a stock split, adjusted to reflect the increase in the number of shares without altering the company's market capitalization.