An Adjusting Journal Entry That Includes an Increase to an Asset

question 123

Multiple Choice

An adjusting journal entry that includes an increase to an asset contra-account would also include an increase in a(n) :

• A) related asset account.
• B) liability account.
• C) revenue account.
• D) expense account.

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Definitions:

Average Net Property

This term typically refers to the average value of a company's property, plant, and equipment net of depreciation, over a certain period of time.

Depreciation Expense

The allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption, wear and tear, or obsolescence.

Estimated Useful Life

The expected period over which a company anticipates deriving benefits from an asset before it becomes obsolete or too costly to maintain.

Units-Of-Production Depreciation

A depreciation method that allocates the cost of an asset over its useful life based on its output or usage rather than the passage of time.