If the Effect of the Credit Portion of an Adjusting

question 3

Multiple Choice

If the effect of the credit portion of an adjusting entry is to increase the balance of a liability account,which of the following describes the effect of the debit portion of the entry?

• A) increases the balance of a contra asset account
• B) increases the balance of an asset account
• C) decreases the balance of an stockholders' equity account
• D) increases the balance of an expense account

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Definitions:

Slotting Allowances

Fees paid by a vendor or manufacturer to a retailer to secure shelf space for their products.

Retail Shelves

Retail Shelves are the physical spaces in stores where products are displayed for sale, playing a critical role in product visibility and accessibility to consumers.

Manufacturers

Entities engaged in the production of goods by transforming raw materials or components into finished products on a large scale.

Cost-Plus Pricing

A pricing strategy where a fixed percentage is added to the production cost to determine the selling price of a product or service.