If the Effect of the Credit Portion of an Adjusting

question 57

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 owner's equity account
• D) increases the balance of an expense account

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Definitions:

Article 2

A section of the Uniform Commercial Code that governs sales of goods in the United States.

Firm Offer

in commercial law refers to a binding proposal made by a seller to sell goods or services at a specified price, which cannot be withdrawn for a certain period.

Merchant

An individual or company engaged in the business of selling goods or services.

Window Casings

Architectural elements surrounding a window to frame it, providing aesthetic and functional benefits such as support and insulation.