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 both net income and stockholders' equity being overstated. Depreciation expense represents the portion of an asset's cost that has been used up during a specific period. Failure to record this expense results in higher net income because expenses are understated, and higher stockholders' equity because depreciation is not reflected as a reduction in the value of the asset.

Failure to Record Depreciation Expense for the Period Results in Which