Chubb Company paid cash to purchase equipment on January 1, Year 1. Select the answer that shows how the recognition of depreciation expense in Year 2 would affect assets, liabilities, equity, net income, and cash flow (+ means increase, - decrease, and NA not affected).

Question

Quizplus · Accepted Answer

Depreciation expense decreases assets by increasing accumulated depreciation and decreases net income, which decreases equity. It does not affect the statement of cash flows.

Chubb Company Paid Cash to Purchase Equipment on January 1