If the adjusting entry for depreciation is not made
A) assets will be understated.
B) owner's equity will be understated.
C) net income will be understated.
D) expenses will be understated.

Question

Quizplus · Accepted Answer

Failing to record depreciation results in expenses being understated because depreciation expense is not recognized. Consequently, net income would be overstated, not understated, as expenses directly reduce net income. Assets and owner's equity would be overstated as well, contrary to being understated.

If the Adjusting Entry for Depreciation Is Not Made