Cara, Inc Purchased a Building on January 1, 2014 for ₤

Multiple Choice

Cara, Inc. purchased a building on January 1, 2014 for ₤ 800,000. The useful life of the building is 10 years. What impact will the appropriate adjusting entry at December 31, 2014 have on its statement of financial position at December 31, 2014?

A) Increased Equity ₤ 80,000.
B) Increased Liabilities ₤ 80,000.
C) Decreased Assets ₤ 80,000.
D) Since the adjusting entry has offsetting debits and credits, there is no impact on the statement of financial position.