O'Hare Company is a manufacturing firm that uses a job-order costing system to determine the costs of its products.During the current accounting period,O'Hare recognized depreciation of $600 on manufacturing equipment.Which of the following describes the effect of this event on the accounting equation?
A) Total assets and total equity are unaffected.
B) Both total assets and total equities increase.
C) Total assets and net income decrease.
D) Total assets increase and net income increase.

Question

Quizplus · Accepted Answer

Depreciation is a non-cash expense and does not impact the total assets or total equity of the company. Therefore, the correct option is A where there is no effect on either the total assets or total equity.

O'Hare Company Is a Manufacturing Firm That Uses a Job-Order