What Effect Does "Recognizing Revenue at the End of the Accounting

question 102

Multiple Choice

What effect does "recognizing revenue at the end of the accounting period for rent previously received in advance" have on the accounting equation for the insurance company?

• A)Assets increase and liabilities decrease.
• B)Assets increase and Stockholders' equity increases.
• C)Assets decrease and liabilities decrease.
• D)Liabilities decrease and Stockholders' equity increases.

---

Definitions:

Office Furniture

Items and fixtures used in an office environment for working and organisational purposes, such as desks, chairs, and filing cabinets.

Straight-Line Method

A depreciation technique that allocates an equal portion of an asset's cost to each year of its useful life.

Resale Value

The estimated amount for which an asset can be sold at the end of its useful life.

Office Furniture

Furniture and related items used in offices, such as desks, chairs, and file cabinets.