Which of the following statement is correct?

Question

BlackTom AI · Accepted Answer

The question asks to identify which statement is correct among the given options.
Option A: 'Accumulated Depreciation-Equipment is not a contra account.' This is inaccurate. Accumulated Depreciation-Equipment is indeed a contra-asset account that offsets the Equipment asset account to reflect the reduction in carrying value due to depreciation.
Option B: 'None of the other three.' This would be correct only if all the other statements are false. Since Options A, C, and D each contain errors, this choice is currently the best candidate, but we still evaluate the others to understand why they are incorrect.
Option C: 'Accumulated Depreciation-Equipment is a contra account, and it is contrary to Depreciation Expense-Equipment.' While it is true that Accumulated Depreciation-Equipment is a contra account, the phrase 'contrary to' Depreciation Expense-Equipment is misleading. Accumulated Depreciation-Equipment is related to Depreciation Expense in that depreciation expense increases over time and accumulates as the contra-asset balance grows, but they are not contraries or opposites in accounting terms. Depreciation Expense appears on the income statement; Accumulated Depreciation-Equipment appears on the balance sheet as a reduction to Equipment. Describing them as 'contrary' misstates their relationship.
Option D: 'Dividend is a contra account, and it is contrary to retained earnings.' This is incorrect. Dividend is not a contra account; it is a distribution of earnings and reduces retained earnings directly. It functions differently from contra accounts, which are designed to offset related asset or liability accounts. Therefore, treating Dividend as a contra account is a factual inaccuracy.
In summary, Options A, C, and D contain specific factual or conceptual mistakes about what kind of account Accumulated Depreciation-Equipment is, how depreciation and its contra account relate, and what role a Dividend plays in the equity section. Given these explanations, Option B correctly states that none of the other three are accurate.

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Which of the following statement is correct?

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ACCT*2200*W04 midterm- Requires Respondus LockDown Browser

Which of the following statement is correct?

查看解析

登录即可查看完整答案

类似问题

In a consumer society, many adults channel creativity into buying things

Economic stress and unpredictable times have resulted in a booming industry for self-help products

People born without creativity never can develop it

A product has a selling price of $20, a contribution margin ratio of 40% and fixed cost of $120,000. To make a profit of $30,000. The number of units that must be sold is: Type the number without $ and a comma. Eg: 20000

Which of the following statement regarding cost is correct:

Under the assumptions used in cost-volume-profit analysis, as the activity increases:

The CVP and break-even analysis are supported by a range of important assumptions. Which of the following is not an assumption of the CVP:

The break-even point is that at which:

更多留学生实用工具

希望你的学习变得更简单

ACCT2200W04 midterm- Requires Respondus LockDown Browser