The depreciation of equipment will require an adjustment that results in:
A)total assets increasing and total expenses increasing.
B)total assets increasing and total expenses decreasing.
C)total assets and revenue decreasing.
D)total assets decreasing and total expenses increasing.

Question

Quizplus · Accepted Answer

Depreciation of equipment is a non-cash expense that reduces the value of long-term assets over time. As assets decrease in value, their carrying amount on the balance sheet also decreases, resulting in a decrease in total assets. At the same time, since depreciation is an expense, it increases the total expenses. Therefore, the correct choice is D - total assets decreasing and total expenses increasing.

The Depreciation of Equipment Will Require an Adjustment That Results