The effect of recording depreciation for the year is a(n)
A)decrease in net income and no change in assets.
B)decrease in assets but no change in owners' equity.
C)increase in assets and an increase in net income.
D)decrease in assets and a decrease in net income.

Question

Quizplus · Accepted Answer

Recording depreciation for the year reduces the amount of assets on the balance sheet. This decrease in assets results in a decrease in net income because it represents the cost of using the assets during the year. Therefore, option D is correct.

The Effect of Recording Depreciation for the Year Is A(n)