Peterson Corporation recorded an adjusting entry using T-accounts as follows: Which of the following reflects how this adjustment affects the company's financial statements?
A)Option A
B)Option B
C)Option C
D)Option D

Question

Peterson Corporation recorded an adjusting entry using T-accounts as follows:  Which of the following reflects how this adjustment affects the company's financial statements? 
A)Option A 
B)Option B 
C)Option C 
D)Option D

Quizplus · Accepted Answer

A debit to depreciation expense increases expenses, decreases net income, and decreases equity. A credit to accumulated depreciation, a contra-asset, decreases assets. The event does not affect cash flows.

Peterson Corporation Recorded an Adjusting Entry Using T-Accounts as Follows