The Adjusting Entry Increases Owners' Equity and Decreases Liabilities

question 121

Multiple Choice

The adjusting entry increases owners' equity and decreases liabilities.

• A) unrecorded revenue
• B) deferred revenue
• C) depreciation
• D) wages

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Definitions:

Securities And Exchange Commission

A U.S. government agency that oversees securities transactions, markets, and investment practices to protect investors.

Depreciation

Depreciation is an accounting method of allocating the cost of a tangible or physical asset over its useful life, reflecting wear and tear, or obsolescence of the asset.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenue, expenses, and profits.

Double-Entry Bookkeeping

Process by which accounting transactions are entered; each individual transaction always has an offsetting transaction.