For the Following Transaction,identify the Type of Change That Would

question 7

Multiple Choice

For the following transaction,identify the type of change that would have occurred in the accounting equation: Assets = Liabilities + Issued Capital + Opening retained profits + Revenue - Expenses - Dividends
12 months' depreciation was charged on the office building.

• A) An asset increased and another asset decreased.
• B) An asset decreased and an expense increased.
• C) An asset decreased and a liability decreased.
• D) A liability increased and an expense increased.

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Definitions:

Time Period Assumption

An accounting principle that suggests a business's activities can be divided into specific time periods for reporting purposes.

Fiscal Year

The one-year period an organization uses for accounting purposes and preparing financial statements, which may or may not align with the calendar year.

Revenue Recognition Principle

A fundamental accounting principle that dictates when revenue should be recognized in the financial statements, typically when it is earned and realizable.

Prepaid Expenses

Funds disbursed before receiving goods or services, documented as assets until they are utilized or consumed.