What Is the Effect of the Adjusting Entry for Depreciation

question 181

Multiple Choice

What is the effect of the adjusting entry for depreciation on the accounting equation?

• A)No effect on assets;Decrease liabilities;Increase stockholders' equity
• B)Decrease assets;No effect on liabilities;Decrease stockholders' equity
• C)Increase assets;No effect on liabilities;Increase stockholders' equity
• D)Decrease assets;Decrease liabilities;No effect on stockholders' equity

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Definitions:

Midpoint Method

A technique used to calculate elasticity by averaging the two points on a demand or supply curve and considering the percentage change from the average.

Price Elasticity

A measure of the sensitivity of demand for a product or service to a change in its price.

Elasticity of Demand

An evaluation of how sensitively the demanded amount of a product responds to changes in price.

Demand Curve

An illustration that depicts the connection between how much of a product consumers want to buy and its cost.