Which of the Following Would Cause Total Assets to Decrease

question 48

Multiple Choice

Which of the following would cause total assets to decrease and total expenses 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:

Net Earnings

Net earnings, also known as net income, represent the total profit of a company after all expenses, taxes, and costs have been subtracted from total revenue.

Equity Multiplier

A financial leverage ratio that measures the proportion of a company's assets that are financed by its shareholders' equity.

Total Assets

The sum of all resources owned by a company, valued in monetary terms, which includes both current and non-current assets.

Total Common Equity

The total of equity capital and retained earnings in a company, signifying the stake held by common shareholders.