What Are the Effects on the Accounting Equation from the Adjustment

question 46

Multiple Choice

What are the effects on the accounting equation from the adjustment for depreciation?

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

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Definitions:

Labor Efficiency Variance

A discrepancy between the actual working hours and the expected standard hours, multiplied by the predetermined salary rate.

Direct Labor Standards

Direct labor standards are predetermined measures for the amount of labor time and cost that should be associated with producing a unit of product or performing a service.

Standard Cost Variances

The differences between the actual costs and the standard costs for manufacturing or service processes, used to control and manage expenses.

Cost of Goods Sold

The direct costs attributable to the production of the goods sold by a company, including material and labor costs.