What is the impact of the adjustment entry for depreciation in the accounting equation?
The debit to Depreciation expense reduces net income, retained earnings and stockholders equity. Credit to Accumulated Decreasing reduces the carrying value and total assets.
What are the implications of the adjustment on the accounting equation?
What are the implications of the adjustment for wages not yet paid during the accounting period on the accounting equation? The total assets and stockholders’ equity are expected to decrease.
What are the accounting effects of the adjustment for which seller has satisfied its performance obligation to buyers during an accounting period that was previously recorded as a liability and what is the impact on the accounting equation?
What are the implications of the adjustment in which the seller fulfilled its performance obligation to buyers during an accounting period that was previously recorded as a liability for the accounting equation? The total liabilities will decline and the stockholders’ equity increase.
Which accounts are affected when an adjustment entry is made for depreciation
The accounts that will be affected by the adjustment are the depreciation account and accumulated depreciation. Accumulated Depreciation refers to the balance sheet item account, while depreciation refers to the income statement account.
How do you convert an expense account into an income summary?
To close the income summary, debit your $61 account and credit your capital account with the same amount. A compound entry in partnerships transfers each partner’s share net income or loss to their capital account. Corporations have income summary that is not linked to the retained earnings account.
What kind of account is income summary for?
The income summary account is a temporary account in which all income statement revenue or expense accounts are transferred at end of accounting period. The net amount that is transferred to the income summary account equals net profit or loss that the business has incurred during the period.