What are the effects on the accounting equation from the adjustment for depreciation?
A)Total assets will increase and total stockholders' equity will increase.
B)Total assets will increase and total stockholders' equity will decrease.
C)Total assets will decrease and total stockholders' equity will decrease.
D)Total assets will decrease and total stockholders' equity will increase.

Question

Quizplus · Accepted Answer

This adjustment increases Accumulated Depreciation,a contra-asset account,and also increases Depreciation Expense.The increase in the contra-asset account decreases total assets.The increase to the expense account decreases net income and,as a result,it also decreases total stockholders' equity.

What Are the Effects on the Accounting Equation from the Adjustment