Final answer:
It is false that a company should reduce the equipment account at the end of the period. The correct procedure is to allocate the cost of the equipment over its useful life through depreciation, which involves an adjusting journal entry crediting Accumulated Depreciation instead of reducing the equipment account directly.
Step-by-step explanation:
The statement that a company should make an adjusting journal entry at the end of the period which reduces the equipment account is false. When a company purchases equipment, it records the asset at its cost in the equipment account. However, the cost is not expensed immediately. Instead, the company uses depreciation to allocate the cost of the equipment over its useful life. The adjusting entry typically includes a debit to the Depreciation Expense account and a credit to the Accumulated Depreciation account, which is a contra asset account that reduces the net book value of the equipment on the balance sheet over time. This process reflects the use and wearing out of the equipment over its useful life, and it matches the expense recognition with the revenue the asset helps to generate, following the matching principle of accounting.