The Adjusting Entries to Record Depreciation or Amortization Expense or to Write

question 91

Multiple Choice

The adjusting entries to record depreciation or amortization expense or to write down assets that have become impaired:

• A)Reduce both net income and cash balances.
• B)Reduce net income,but have no direct effect on cash balances.
• C)Decrease cash balances,but have no direct effect upon net income.
• D)Affect neither net income nor cash balances.

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Definitions:

Automatic Stabilizers

Economic strategies and initiatives aimed at stabilizing a country's economic fluctuations without further action from the government or policy makers.

Built-in Stabilizer

Economic policies or instruments, like progressive taxation and welfare, that automatically reduce the amplitude of economic fluctuations without additional government intervention.

Progressive Income Tax

A tax system in which the tax rate increases as the taxable amount increases, generally applied to income tax to ensure higher earners pay a larger percentage of their income.

Unemployment Compensation

Unemployment Compensation is a government-provided financial assistance to individuals who have lost their job through no fault of their own, aiming to support them temporarily.