Income-Smoothing Has Been Applied to a German Subsidiary of Company

Multiple Choice

Income-smoothing has been applied to a German subsidiary of Company Inc, as it had an abnormally high operating income last year. Which of the following would the accountants working for the subsidiary likely have done?

A) Debited an expense account and credited an equity account.
B) Credited an expense account and debited an equity account.
C) Credited an expense account and debited a provision account appearing under the liabilities section.
D) Debited an expense account and credited a provision account appearing under the liabilities section.