Which of the following best describes one effect of recognizing expenses incurred by a business entity?
A)Assets will increase.
B)Liabilities will decrease.
C)Contributed capital will increase.
D)Retained earnings will decrease.

Question

Quizplus · Accepted Answer

Recognizing expenses incurred by a business entity will decrease its retained earnings, as expenses are deducted from revenues to calculate the net income or loss, which ultimately affects the retained earnings.

Which of the Following Best Describes One Effect of Recognizing