Which Is One Effect of the Following Journal Entry

question 4

Multiple Choice

Which is one effect of the following journal entry?

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

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Definitions:

Final Cost

The total cost incurred for goods or services, including all related expenses.

Perpetual Inventory System

A continuous tracking system for inventory that updates item counts after each sale or purchase, providing real-time inventory levels.

FIFO

An inventory valuation method where the first items purchased or produced are the first ones sold, standing for "First In, First Out."

Cost of Goods Sold

The immediate expenses related to creating a company's sold products, encompassing the price of materials and the labor specifically involved in manufacturing the item.