What is the effect of the adjusting entry for depreciation on the accounting equation?
A)No effect on assets;Decrease liabilities;Increase stockholders' equity
B)Decrease assets;No effect on liabilities;Decrease stockholders' equity
C)Increase assets;No effect on liabilities;Increase stockholders' equity
D)Decrease assets;Decrease liabilities;No effect on stockholders' equity

Question

Quizplus · Accepted Answer

The adjusting entry to record depreciation includes a debit to Depreciation Expense (to increase that expense account)and a credit to Accumulated Depreciation (to increase that contra-asset account).The increase to the contra-asset account decreases assets.The increase in expenses decreases net income,which decreases stockholders' equity.There is no effect on liabilities.

What Is the Effect of the Adjusting Entry for Depreciation