Accounting for IGCSE & O level - Accounting Procedures (Section 9 - No. 25)
How does depreciation affect the balance sheet?
Increases assets and decreases liabilities.
Decreases assets and increases liabilities.
Decreases assets and decreases equity.
Increases assets and increases equity.
Explanation
Depreciation reduces the net book value of assets, which decreases assets and decreases equity through retained earnings.
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