Cara, IncPurchased a Building on January 1, 2011 for ₤ 500,000

Multiple Choice

Cara, Inc.purchased a building on January 1, 2011 for ₤ 500,000.The useful life of the building is 10 years.What impact will the appropriate adjusting entry at December 31, 2011 have on its statement of financial position at December 31, 2011?

A) Increased Equity ₤ 50,000.
B) Increased Liabilities ₤ 50,000.
C) Decreased Assets ₤ 50,000.
D) Since the adjusting entry has offsetting debits and credits, there is no impact on the statement of financial position.