The adjusting entries to record depreciation or amortization expense or to write down assets that have become impaired:
A)Reduce both net income and cash balances.
B)Reduce net income,but have no direct effect on cash balances.
C)Decrease cash balances,but have no direct effect upon net income.
D)Affect neither net income nor cash balances.

Question

Quizplus · Accepted Answer

Adjusting entries for depreciation or amortization expense and write-downs of impaired assets only affect the income statement, reducing net income, but have no direct effect on cash balances as they are non-cash expenses.

The Adjusting Entries to Record Depreciation or Amortization Expense or to Write