The correct statement regarding a long-lived asset such as equipment is: "When adjusting entries are recorded, the original cost in the Equipment account will not change."

Here's why:

1. The original cost of an asset, such as equipment, is the amount that was initially paid to acquire the asset. This cost is recorded in the Equipment account when the asset is first acquired.

2. Adjusting entries are made at the end of an accounting period to update the accounts for accruals and deferrals, among other things. For example, an adjusting entry might be made to record depreciation on the equipment.

3. However, these adjusting entries do not change the original cost of the equipment. The original cost remains the same, because it represents the amount that was initially paid for the equipment.

4. Instead, adjusting entries for things like depreciation are typically recorded in separate contra asset accounts, which are used to track the accumulated depreciation of the asset. This allows the company to show both the original cost and the accumulated depreciation of the asset on its balance sheet.

So, the original cost in the Equipment account does not change when adjusting entries are recorded.

Question

The correct statement regarding a long-lived asset such as equipment is: "When adjusting entries are recorded, the original cost in the Equipment account will not change."

Here's why:

1. The original cost of an asset, such as equipment, is the amount that was initially paid to acquire the asset. This cost is recorded in the Equipment account when the asset is first acquired.

2. Adjusting entries are made at the end of an accounting period to update the accounts for accruals and deferrals, among other things. For example, an adjusting entry might be made to record depreciation on the equipment.

3. However, these adjusting entries do not change the original cost of the equipment. The original cost remains the same, because it represents the amount that was initially paid for the equipment.

4. Instead, adjusting entries for things like depreciation are typically recorded in separate contra asset accounts, which are used to track the accumulated depreciation of the asset. This allows the company to show both the original cost and the accumulated depreciation of the asset on its balance sheet.

So, the original cost in the Equipment account does not change when adjusting entries are recorded.

Knowee AI · Accepted Answer

The correct statement regarding a long-lived asset such as equipment is: "When adjusting entries are recorded, the original cost in the Equipment account will not change."

Here's why:

1. The original cost of an asset, such as equipment, is the amount that was initially paid to acquire the asset. This cost is recorded in the Equipment account when the asset is first acquired.

2. Adjusting entries are made at the end of an accounting period to update the accounts for accruals and deferrals, among other things. For example, an adjusting entry might be made to record depreciation on the equipment.

3. However, these adjusting entries do not change the original cost of the equipment. The original cost remains the same, because it represents the amount that was initially paid for the equipment.

4. Instead, adjusting entries for things like depreciation are typically recorded in separate contra asset accounts, which are used to track the accumulated depreciation of the asset. This allows the company to show both the original cost and the accumulated depreciation of the asset on its balance sheet.

So, the original cost in the Equipment account does not change when adjusting entries are recorded.

Question

Solution

Similar Questions

Upgrade your grade with Knowee