Peterson Corporation recorded an adjusting entry using T-accounts as follows:

Which of the following reflects how this adjustment affects the company's financial statements?

A)Option A
B)Option B
C)Option C
D)Option D

Question

Peterson Corporation recorded an adjusting entry using T-accounts as follows:

Which of the following reflects how this adjustment affects the company's financial statements?

A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

A debit to depreciation expense increases expenses,which decreases net income and stockholders' equity (retained earnings).A credit to accumulated depreciation,a contra-asset,decreases assets.The event does not affect cash flows.

Peterson Corporation Recorded an Adjusting Entry Using T-Accounts as Follows