The depreciation of equipment will require an adjustment that results in
A) total assets increasing and total expenses increasing.
B) total assets increasing and total expenses decreasing.
C) total assets and expenses decreasing.
D) total assets decreasing and total expenses increasing.

Question

Quizplus · Accepted Answer

Depreciation results in the decrease of the value of equipment (which is an asset), leading to a decrease in total assets. It is also considered an expense, hence it leads to an increase in total expenses. Therefore, the correct choice is D where total assets decrease and total expenses increase.

The Depreciation of Equipment Will Require an Adjustment That Results