Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 25 - No. 29)
What is the effect on the financial statements of recording depreciation expense?
Assets increase, liabilities decrease.
Assets decrease, equity decreases.
Assets decrease, equity increases.
Assets increase, equity increases.
Explanation
Depreciation decreases the value of the asset (asset) and decreases net income, therefore decreasing equity.
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