Which of the following does not correctly describe the following adjusting journal entry?
A)Total assets decrease.
B)Retained earnings are not affected.
C)Stockholders' equity decreases.
D)Net income decreases.

Question

Which of the following does not correctly describe the following adjusting journal entry? 
A)Total assets decrease. 
B)Retained earnings are not affected. 
C)Stockholders' equity decreases. 
D)Net income decreases.

Quizplus · Accepted Answer

The adjusting journal entry is not affecting the retained earnings account, so statement B is not correct. The entry could be affecting other accounts that might lead to a decrease in assets, stockholders' equity and net income.

Which of the Following Does Not Correctly Describe the Following