By removing a tangible asset from the business (a debit), the books will be ___________ by the exact amount of the tangible asset misappropriated.

Question

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When a tangible asset is misappropriated (stolen or removed without authorization), a debit (an entry that decreases assets) is removed from the business, which will cause the books to be out-of-balance by the exact same amount. This means that the total debits and the total credits will no longer match, and the books will need to be adjusted to correct the imbalance. Choices A, C, and D are not relevant to the situation described.

By Removing a Tangible Asset from the Business (A Debit)