Recording an adjusting journal entry to recognize depreciation would cause which of the following?
A)An increase in assets,an increase in liabilities,and a decrease in expenses.
B)A decrease in assets,an increase in liabilities,and an increase in expenses.
C)An increase in liabilities,an increase in expenses,and a decrease in stockholders' equity.
D)A decrease in assets,a decrease in stockholders' equity,and an increase in expenses.

Question

Quizplus · Accepted Answer

The adjusting entry to recognize depreciation includes a debit to Depreciation Expense,which increases expenses.The increase in expenses would decrease net income and decrease Retained Earnings,a component of stockholders' equity.The adjustment also includes a credit to Accumulated Depreciation,a contra-asset account,which is like a negative asset account that is subtracted from the Equipment account in the assets section of the balance sheet.As such,the increase in this contra-asset account decreases assets.

Recording an Adjusting Journal Entry to Recognize Depreciation Would Cause