Depreciation expense decreases both assets and equity.

Name: Depreciation expense decreases both assets and equity.
Brand: Quizplus
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Quizplus · Accepted Answer

Depreciation expense is the allocation of the cost of a long-term asset over its useful life. This results in a decrease in the value of the asset on the balance sheet (which is reported as a contra-asset account called accumulated depreciation) and a decrease in the equity of the company, as the company has used up a portion of the asset's value.

Depreciation Expense Decreases Both Assets and Equity