Wallace Repair Company incurred $1,500 as a labor expense and promised to pay the labor agency within 30 days.Which of the following will decrease as a result of this transaction?

Question

Quizplus · Accepted Answer

The labor expense will decrease the owner's equity because expenses reduce net income, which in turn reduces retained earnings, a component of owner's equity.

Wallace Repair Company Incurred $1,500 as a Labor Expense and Promised