Use This Information to Answer the Following Question

question 12

Multiple Choice

Use this information to answer the following question. Here is the balance sheet for Costello Container Company:

-If the equipment were sold for $13,000,then the Retained Earnings account would

• A)increase by $37,000.
• B)increase by $13,000.
• C)decrease by $13,000.
• D)stay the same.

---

Definitions:

Adjusting Entry

An entry made in the books of accounts at the end of an accounting period to allocate income and expenditure to the period in which they actually occurred.

Credit Sales

Transactions involving the transfer of goods or services to a customer with the agreement that payment will be made at a later date.

Uncollectible Accounts

Debts owed to a company that are considered unlikely to be paid by the debtor, often resulting in a write-off for the creditor.

Adjusting Entry

Journal entries made in accounting records at the end of an accounting period to allocate income and expenditures to the period in which they actually occurred.