When an adjusting entry for depreciation expense for the accounting period is recorded,

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When an adjusting entry for depreciation expense is recorded, assets decrease because the value of the assets has decreased due to wear and tear or obsolescence, and shareholders' equity decreases because net income is decreased by the amount of depreciation expense. The amount of depreciation expense is added to accumulated depreciation which is a contra-asset account that offsets the original cost of the asset on the balance sheet. Therefore, the options A, B and D are incorrect.

When an Adjusting Entry for Depreciation Expense for the Accounting