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:

Unemployment Rate

The rate of people in the workforce who are jobless and in active pursuit of employment.

Frictionally Unemployed

Individuals temporarily out of work while transitioning between jobs or looking for their first jobs.

Deflation

A decrease in the general price level of goods and services over time.

High Inflation

A situation where the price level of goods and services rises rapidly and consistently, eroding purchasing power.