The Entry to Recognize Depreciation Expense Incurred on Equipment Involves

question 55

Multiple Choice

The entry to recognize depreciation expense incurred on equipment involves which of the following?

• A)An increase in assets
• B)An increase in liabilities
• C)A decrease in assets
• D)A decrease in liabilities

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Definitions:

ROE

Return on Equity, a measure of the profitability of a business in relation to the equity, calculated as net income divided by shareholder's equity.

Plowback

The reinvestment of earnings by a company back into its business, often for expansion or development; also known as retained earnings.

PEG Ratio

A stock's price-to-earnings ratio divided by the growth rate of its earnings, used to determine the relative trade-off between the price of a stock, the earnings generated per share, and the company's expected growth.

ROE

Return on Equity, a measure of financial performance calculated by dividing net income by shareholder equity, indicating how effectively management is using a company’s assets to create profits.