When an Adjusting Entry for Depreciation Expense for the Accounting

question 31

Multiple Choice

When an adjusting entry for depreciation expense for the accounting period is recorded,

• A)assets and shareholders' equity increase.
• B)the amount of depreciation expense is subtracted from accumulated depreciation.
• C)assets and shareholders' equity decrease.
• D)assets increase and shareholders' equity decreases.

---

Definitions:

Pure Competition

A market structure characterized by a large number of sellers offering identical products with no single seller able to influence the market price.

Oligopoly

A market structure characterized by a small number of firms controlling a large market share, leading to limited competition.

Monopolistically Competitive

Characterizes a market environment where various businesses market products that resemble each other but are not exact duplicates, thereby providing them with some level of control over the market.

Allocative Efficiency

A state of resource allocation in which goods and services are distributed according to consumer preferences, achieving optimal distribution.