An Increase in Depreciation Expense Will (Other Things Equal)

question 71

Multiple Choice

An increase in depreciation expense will (other things equal) :

• A) increase net income.
• B) decrease net income.
• C) increase taxable income.
• D) decrease the market value of assets.

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Definitions:

Uncollectible Receivables

Amounts owed to a company that it does not expect to recover, often treated as a bad debt expense.

Allowance for Doubtful Accounts

A contra-asset account that reduces the total receivables on the balance sheet to reflect the amount expected to be uncollectable.

Allowance for Doubtful Accounts

An accounting method that reduces accounts receivable on a company's balance sheet by estimating the amount of receivables that will not be collected.

Uncollectible Receivables

Debts owed to a company that are considered unlikelihood to be collected.