If the Adjusting Entry for Depreciation Is Not Made

question 227

Multiple Choice

If the adjusting entry for depreciation is not made,

• A) assets will be understated.
• B) stockholders' equity will be understated.
• C) net income will be understated.
• D) expenses will be understated.

---

Definitions:

Common Dividend Payable

Liabilities on a company's balance sheet representing the amount of dividends that are owed to shareholders on common stock.

Shares Outstanding

Shares outstanding refer to all shares currently owned by shareholders, including restricted shares owned by company insiders and share blocks held by institutional investors.

Common Stock

A form of corporate equity ownership, a type of security that represents ownership in a corporation and gives holders voting rights and a share in the company's profits via dividends.

Paid-In Capital

Funds that shareholders contribute to a company in exchange for equity, beyond the par value of the shares.