Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 48 - No. 45)
What is the effect of depreciation expense on the financial statements?
Increases net income and decreases assets.
Decreases net income and decreases assets.
Increases net income and increases assets.
Decreases net income and increases assets.
Explanation
Depreciation expense reduces net income (through the income statement) and reduces the carrying value of the asset on the balance sheet.
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