Failure to record depreciation at year end will result in all of the following except
A)understatement of total liabilities.
B)overstatement of total assets.
C)overstatement of net income.
D)overstatement of owner's equity.

Question

Quizplus · Accepted Answer

Depreciation expense reduces net income, which in turn reduces retained earnings, a component of owner's equity. Not recording depreciation would not affect total liabilities directly; it would lead to an overstatement of assets, net income, and owner's equity.

Failure to Record Depreciation at Year End Will Result in All