Which of the following would cause total assets to decrease and total expense to increase?
A)Recording the depreciation of equipment
B)Recording the consumption of supplies
C)Recording the expiration of Prepaid Rent Expense
D)All of the above would have that effect

Question

Quizplus · Accepted Answer

A) Recording the depreciation of equipment would decrease total assets because it represents the decrease in value of the equipment over time. At the same time, it would increase total expenses because it is an expense incurred in order to generate revenue. 
B) Recording the consumption of supplies would not affect total assets because supplies are considered an expense when they are consumed. However, it would increase total expenses because it is an expense incurred in order to generate revenue. 
C) Recording the expiration of Prepaid Rent Expense would decrease total assets because it represents the use of a prepaid asset. At the same time, it would increase total expenses because it is an expense incurred in order to generate revenue. 
Therefore, all of the above choices would cause total assets to decrease and total expenses to increase.

Which of the Following Would Cause Total Assets to Decrease