Which of the following does not correctly describe the following adjusting journal entry?
A)Total assets decrease.
B)Retained earnings are not affected.
C)Stockholders' equity decreases.
D)Net income decreases.

Question

Which of the following does not correctly describe the following adjusting journal entry? 
A)Total assets decrease. 
B)Retained earnings are not affected. 
C)Stockholders' equity decreases. 
D)Net income decreases.

Quizplus · Accepted Answer

This entry results in a decrease in stockholders' equity and a decrease in net income, but it does not impact retained earnings.

Which of the Following Does Not Correctly Describe the Following