What is the effect of an impairment loss on the accounting equation?
A)It increases total assets.
B)It has no effect.
C)It increases total stockholders' equity.
D)It decreases total stockholders' equity.

Question

Quizplus · Accepted Answer

An impairment loss is recorded with a debit to Loss on Impairment (which increases expenses and,as such,decreases net income and stockholders' equity)and a credit to the impaired asset's account (which decreases assets).

What Is the Effect of an Impairment Loss on the Accounting