In Preparing the Adjusting Journal Entries for Year 4, the Accountant

question 59

Multiple Choice

In preparing the adjusting journal entries for Year 4, the accountant for a large local law firm discovered that depreciation on furniture, fixtures and office equipment was understated by $40,000 for Year 3. The previous accountant had not depreciated a leasehold improvement because she believed that the improvement would revert to the office owner at the end of the lease term. The present accountant, knowing better, prepared the journal entry to make the correction. That entry, assuming a tax rate of 30%, would include which of the following:

• A) cr. retained earnings $28,000.
• B) cr. accumulated depreciation $28,000.
• C) dr. retained earnings $28,000.
• D) dr. depreciation expense $28,000.

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Definitions:

Incidence of Poverty

The proportion or rate of individuals or households whose income falls below the poverty line, indicating their inability to afford basic needs.

White (Non-Hispanic) People

A demographic group identified by the U.S. Census Bureau referring to individuals who self-identify as white and not of Hispanic or Latino origin.

Women

Female humans, often referred to in contexts concerning social, cultural, and economic issues specific to their gender.

Children Under 18

Individuals who are younger than 18 years old, considered minors in most jurisdictions.