Which one of the following is not a justification for adjusting entries?Group of answer choicesAdjusting entries are necessary to ensure that the revenue recognition principle is followed.Adjusting entries are necessary to ensure that the matching principle is followed.Adjusting entries are necessary to enable financial statements to conform with GAAP.Adjusting entries are necessary to bring the general ledger accounts in line with the budget. PreviousNext

The Harris Company Ltd should make the following adjusting entry:

Debit Depreciation Expense, $50; Credit Accumulated Depreciation,$50.

Here's why:

1. Depreciation is the process of allocating the cost of a tangible asset over its useful life. In this case, the annual depreciation of the computer is $600.

2. However, since the computer was purchased on 1 December and the financial statements are being prepared on 31 December, only one month's worth of depreciation should be recorded in this fiscal year.

3. Therefore, the monthly depreciation is $600 / 12 =$50.

4. To record this, you would debit (increase) Depreciation Expense by $50 and credit (increase) Accumulated Depreciation by$50.

So, the correct adjusting entry is:

Debit Depreciation Expense $50 Credit Accumulated Depreciation$50