Lush Lawns Corporation incurred $1,500 labor expense and promised to pay the labor agency within 30 days.Which of the following would decrease as a result of this transaction?

Question

Quizplus · Accepted Answer

The labor expense will decrease Stockholders' Equity because it is an expense that reduces net income, which in turn reduces retained earnings, a component of Stockholders' Equity.

Lush Lawns Corporation Incurred $1,500 Labor Expense and Promised to Pay