Question: 1. If the effect of an adjustment is to increase the balance of an asset account, which of the following statements describes the effect of the adjustment on the other account?
a. Increases the balance of a revenue account.
b. Increases the balance of a liability account.
c. Increases the balance of an expense account.
2. (a) Explain the purpose of the two accounts: Depreciation Expense and Accumulated Depreciation.
(b) Is it customary for the balances of the two accounts to be equal?
(c) In what financial statements, if any, will each account appear?