How Will the Following Adjusting Journal Entry Affect the Accounting

question 37

Multiple Choice

How will the following adjusting journal entry affect the accounting equation?

• A) increase assets, increase revenues
• B) increase liabilities, increase revenues
• C) decrease liabilities, increase revenues
• D) decrease liabilities, decrease revenues

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Definitions:

Social Security Administration

A U.S. government agency that administers social security, a social insurance program consisting of retirement, disability, and survivors benefits.

W-3 Transmittal Form

A tax form used by employers to report the total earnings, Social Security wages, Medicare wages, and withholding for all employees for a year.

Federal Withholding Methods

Procedures the IRS sets for employers to withhold taxes from employees' paychecks, impacting the employees' net income and tax liabilities.

Backup Withholding

A form of withholding on certain income such as interest and dividends for taxpayers who fail to provide their correct taxpayer identification number (TIN) to payers.