Which of the following describes the effect of recording depreciation expense at year-end?
A)Net income decreases and total assets aren't affected.
B)Total assets decrease and stockholders' equity is not affected.
C)Net income decreases and total assets decrease.
D)Stockholders' equity is not affected and net income decreases.

Question

Quizplus · Accepted Answer

The journal entry increases expenses, which decreases both net income and total assets. Total assets decrease because the contra-account accumulated depreciation is increased.

Which of the Following Describes the Effect of Recording Depreciation