Which of These Adjustments Decreases Net Income for the Period

question 79

Multiple Choice

Which of these adjustments decreases net income for the period?

• A) recognition of depreciation on plant assets
• B) recognition of interest earned on a note receivable
• C) recognition of services provided to customers but for which cash has not yet been received
• D) recognition of rent earned that has been received in advance from customers

---

Definitions:

FASB

The Financial Accounting Standards Board, a private, non-profit organization standard setter, which establishes the generally accepted accounting principles (GAAP) within the United States.

Agency Theory

A framework that analyzes the relationship and conflicts between principals (owners) and agents (managers) in a corporation, focusing on how to align their interests.

Managers' Behavior

The actions and decisions made by managers in the course of operating a business, which can significantly impact the company's performance and culture.

Stockholders

Individuals or entities that own shares in a corporation, granting them certain rights such as voting on corporate matters and receiving dividends.