Recording an Adjusting Journal Entry to Recognize Amortization Would Cause

question 89

Multiple Choice

Recording an adjusting journal entry to recognize amortization would cause which of the following?

• A)An increase in liabilities and expenses,and a decrease in shareholders' equity.
• B)A decrease in assets,and an increase in expenses.
• C)A decrease in assets,an increase in liabilities,and an increase in expenses.
• D)None of the above.

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Definitions:

Corporate Taxes

Taxes levied by governments on the income or profit of corporations and businesses.

Profits

The financial gain obtained when the amount of revenue gained from a business activity exceeds the expenses, costs, and taxes involved in sustaining the activity.

Firms

Business organizations involved in the production and sale of goods and services.

Payroll Tax

Taxes imposed on employers and employees, calculated as a percentage of the salaries that employers pay to their staff.