When adjusting for depreciation, which of the following is one effect of the adjustment?
A) Accumulated depreciation is debited.
B) The asset's book value declines.
C) The cost of the equipment declines.
D) The market value of the equipment declines.

Question

Quizplus · Accepted Answer

The adjusting entry creates a credit to accumulated depreciation and a debit to depreciation expense. The credit causes the book value to decline because it increases the contra account that is shown as a deduction from the cost of the equipment on the balance sheet.

When Adjusting for Depreciation, Which of the Following Is One