Pulse Plastics Inc.realized a decrease in net plant and equipment from last year's balance sheet to this year.If the firm did not sell or salvage any existing plant and equipment,which of the following statements MUST be true?

Question

Quizplus · Accepted Answer

If there was a decrease in net plant and equipment, it means that the depreciation expense exceeded the value of new plant and equipment purchases. This means that Option D must be true. Option A could also be true, but it is not necessarily always true as the decrease in net plant and equipment could be due to other reasons such as write-offs or impairment charges. Option B is not true as plant and equipment are typically balance sheet entries. Option C could be true or false depending on the specific situation, but it is not a necessary conclusion from the information provided.