Accounting: What the Numbers Mean 9th Edition by Wayne W McManus, Daniel F Viele, David H Marshall

Exercise 17

For the following questions, circle the best response.

The entry to record depreciation on long-term assets

a. decreases total assets and increases net income.

b. decreases current assets and increases net income.

c. decreases total assets and decreases net income.

d. increases total assets and increases net income.

e. increases total assets and decreases net income.

Step 1 of 2

Since accumulated depreciation is a contra asset account, the entry to record depreciation on long-term assets decreases both total assets and net income.

Therefore, the correct answer is option c, that is, decreases total assets and decreases net income.

The correct answer is option c i.e. Decreases total assets and decreases net income.