An expense has what effect on the accounting equation?
A)Decrease liabilities.
B)Decrease stockholders' equity.
C)Increase assets.

Name: An expense has what effect on the accounting equation? A)Decrease liabilities. B)Decrease stockholders' equity. C)Increase assets.
Brand: Quizplus
Rating: 4.8 (44 reviews)

Question

Quizplus · Accepted Answer

Expenses decrease stockholders' equity because they represent costs associated with operating the business, which reduces the net income and, consequently, the retained earnings component of stockholders' equity.

An Expense Has What Effect on the Accounting Equation