Which of the following does not correctly describe the following journal entry?
A)Total assets do not change.
B)The transaction is an example of a deferral.
C)Stockholders' equity decreases.
D)Net income is not affecteD.This journal entry increases and decreases two different asset accounts; there is no impact on stockholders' equity.

Question

Which of the following does not correctly describe the following journal entry? 
A)Total assets do not change. 
B)The transaction is an example of a deferral. 
C)Stockholders' equity decreases. 
D)Net income is not affecteD.This journal entry increases and decreases two different asset accounts; there is no impact on stockholders' equity.

Quizplus · Accepted Answer

The journal entry increases and decreases two different asset accounts; there is no impact on stockholders' equity, therefore option C is incorrect. Options A, B and D are valid statements.

Which of the Following Does Not Correctly Describe the Following