In Consolidation at January 1, 2019, What Adjustment Is Necessary

question 101

Multiple Choice

In consolidation at January 1, 2019, what adjustment is necessary for Hogan's Buildings account?

• A) $2,000 increase.
• B) $2,000 decrease.
• C) $1,800 increase.
• D) $1,800 decrease.
• E) No change.

---

Definitions:

Accrual

The recognition of revenue or expenses that have been earned or incurred but not yet recorded or paid, following the accrual basis of accounting.

Adjusting Entries

Toward the end of an accounting period, entries are made to attribute revenues and expenditures to the period in which they essentially occurred.

Stockholders' Equity

The residual interest in the assets of the entity after deducting liabilities, representing the ownership interest of shareholders.