Which Is One Effect of the Following Journal Entry

question 122

Multiple Choice

Which is one effect of the following journal entry?

• A)Increases equity
• B)Increases liabilities
• C)Decreases assets
• D)Increases assets

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Definitions:

Winding Down Phase

The winding down phase is the period during which business operations are gradually ceased, and the final affairs of a business are concluded.

Collecting Assets

The process of identifying, gathering, and managing the assets of a debtor to satisfy claims during bankruptcy or liquidation.

Taking Inventory

The process of counting and listing items in stock, typically done periodically to control stock levels and assist in financial accounting.

Winding Up Process

The procedure of settling the accounts and liquidating the assets of a company for the purpose of distributing the net assets to shareholders and dissolving the business.