What Are the Effects on the Accounting Equation from the Adjustment

question 16

Multiple Choice

What are the effects on the accounting equation from the adjustment for revenue earned during the accounting period that had previously been recorded as a liability?

• A)Total liabilities will increase and total stockholders' equity will decrease.
• B)Total liabilities will increase and total stockholders' equity will increase.
• C)Total liabilities will decrease and total stockholders' equity will increase.
• D)Total liabilities will decrease and total stockholders' equity will decrease.

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Definitions:

Paralegals

Legal assistants who support lawyers by performing tasks such as research, drafting documents, and organizes files.

Merger

The process by which two or more entities combine to form a single entity, often to enhance competitiveness or expand market reach.

Law and Equity

The comprehensive system in legal jurisdictions where remedies (solutions) can be provided under both common law (law) and fairness (equity).

Federal System

The system of government established by the Constitution, in which the national government and the state governments share sovereign power.