Flynn Company experienced an accounting event that affected its financial statements as indicated below: Which of the following accounting events could have caused these effects on Flynn's statements?
A) Recognized depletion expense on a copper mine.
B) Recognized depreciation expense under the double declining balance method.
C) Amortized patent cost under the straight-line method.
D) All of these.

Question

Flynn Company experienced an accounting event that affected its financial statements as indicated below:  Which of the following accounting events could have caused these effects on Flynn's statements?
A) Recognized depletion expense on a copper mine. 
B) Recognized depreciation expense under the double declining balance method. 
C) Amortized patent cost under the straight-line method. 
D) All of these.

Quizplus · Accepted Answer

All of these accounting events could have caused these effects on Flynn's statements. Depletion and depreciation expenses both decrease net income, while also reducing the value of the related assets on the balance sheet. Amortization of patent cost also reduces net income and the value of the intangible asset on the balance sheet.

Flynn Company Experienced an Accounting Event That Affected Its Financial