Which of the Following Would Cause Total Assets to Decrease

question 34

Multiple Choice

Which of the following would cause total assets to decrease and total expense to increase?

• A)Recording the depreciation of equipment
• B)Recording the consumption of supplies
• C)Recording the expiration of Prepaid Rent Expense
• D)All of the above would have that effect

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Definitions:

Percentage Allocation Method

A method used in various financial and accounting practices where costs or revenues are allocated based on a specified percentage to different objects or activities.

Income Tax Expense

The total amount of income tax a company is obligated to pay to the government, calculated based on the taxable income of the business.

Initial Value Method

An accounting approach where investments are recorded at their acquisition cost, without subsequent adjustment for changes in market value.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from revenue.