Which of the following correctly describes the following adjusting journal entry?
A)Total assets do not change.
B)The transaction is an example of an accrual.
C)Stockholders' equity decreases.
D)Net income is not affecteD.Accrued revenues are previously unrecorded revenues that need to be adjusted at the end of the accounting period to reflect the amount earned and the related receivable account.

Question

Which of the following correctly describes the following adjusting journal entry? 
A)Total assets do not change. 
B)The transaction is an example of an accrual. 
C)Stockholders' equity decreases. 
D)Net income is not affecteD.Accrued revenues are previously unrecorded revenues that need to be adjusted at the end of the accounting period to reflect the amount earned and the related receivable account.

Quizplus · Accepted Answer

The mention of an "adjusting journal entry" and "accrual" indicates that the transaction is an example of an accrual. It is not indicated whether stockholders' equity decreases or whether net income is affected. There is not enough information to determine whether total assets change or not.

Which of the Following Correctly Describes the Following Adjusting Journal