Failure to record depreciation expense for the period results in which of the following?

Question

Quizplus · Accepted Answer

Failure to record depreciation expense for the period results in overstatement of net income, as expenses are understated. This, in turn, results in overstatement of retained earnings and consequently, stockholders’ equity. However, since depreciable assets are not being reduced for their decrease in value, total assets are also overstated.

Failure to Record Depreciation Expense for the Period Results in Which