If the year-end depreciation adjustment was not recorded:
A)assets and owners' equity would be understated
B)liabilities and owners' equity would be overstated
C)assets and net income would be overstated
D)net income and owners' equity would be understated

Question

Quizplus · Accepted Answer

If the year-end depreciation adjustment was not recorded, assets would not be reduced by the depreciation expense, leading to an overstatement of assets. Similarly, net income would be overstated because the expense that should have reduced it (depreciation expense) was not recorded.

If the Year-End Depreciation Adjustment Was Not Recorded