Which of These Correctly Shows the Effect of Charging Depreciation

question 28

Multiple Choice

Which of these correctly shows the effect of charging depreciation on equipment for the period?

• A) increase in accumulated depreciation; decrease in the carrying value of equipment
• B) decrease in accumulated depreciation; decrease in the carrying value of equipment
• C) increase in accumulated depreciation; increase in the carrying value of equipment
• D) none of the above

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Definitions:

Credit

A financial term describing the ability to borrow money or access goods or services with the understanding that payment will be made in the future.

Unearned Revenues

Unearned revenues refer to money received by a company for goods or services that have not yet been provided to the customer.

Liability

A financial obligation or debt owed by an individual or company to another entity, requiring the transfer of resources at a future date.

Credits

An accounting entry that increases liabilities or equity or decreases assets on a company's balance sheet.