A New Accountant Working for Metcalf Company Records $800 Depreciation

question 42

Multiple Choice

A new accountant working for Metcalf Company records $800 Depreciation Expense on store equipment as follows: The effect of this entry is to:

• A) adjust the accounts to their proper amounts on December 31.
• B) understate total assets on the balance sheet as of December 31.
• C) overstate the book value of the depreciable assets at December 31.
• D) understate the book value of the depreciable assets as of December 31.

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Definitions:

Fraud

Intentional deception or misrepresentation made by a person or entity to gain an unfair advantage or harm another party.

Benefit-of-the-Bargain Damages

Compensation in contract law designed to cover the difference between the value of what was promised in a contract and what was received, ensuring the injured party receives the expected economic benefit.

Statute of Frauds

A law that requires certain types of contracts to be in writing and signed to be legally enforceable.

Enforceability

The characteristic of a legal agreement or obligation that makes it legally binding and capable of being upheld or imposed in a court of law.