An Adjusting Entry Can Include a Debit to A(n)

question 151

Multiple Choice

An adjusting entry can include a debit to a(n)

• A)expense and a credit to an asset.
• B)cash and a credit to a revenue.
• C)liability and a credit to cash.
• D)liability and a credit to an asset.

---

Definitions:

Lessors

Parties that lease or rent out assets to lessees in exchange for periodic payments.

Leased Assets

Assets that are used by an entity under the terms of a lease agreement, which entails periodic payments for a specified time.

Operating Leases

Lease agreements for a shorter period than the asset's useful life, where the lessee does not assume the risks and rewards of ownership.

Capital Leases

Leases that are recognized as asset purchases for accounting purposes, where the lessee gains ownership rights of the leased asset at the end of the lease term.