The adjusting entries to record depreciation or amortization expense, or to write down assets that have become impaired:

Question

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Depreciation or amortization expense and impairment write-downs are non-cash expenses that reduce profit but do not have a direct effect on cash balances. The adjusting entries that record these expenses do not involve any actual cash outflow, but are necessary to accurately reflect the decrease in the value of the assets over time.

The Adjusting Entries to Record Depreciation or Amortization Expense, or to Write