Question: What is the effect on the financial statements of recording a $15,000 repair expense as a debit to Machinery and a credit to Cash?
- Assets overstated, liabilities unaffected, stockholders' equity overstated, and net income overstated.
- Assets understated, liabilities unaffected, stockholders' equity understated, and net income overstated.
- Assets overstated, liabilities understated, stockholders' equity unaffected, and net income overstated.
- This entry has no effect on the financial statements.