What Is the Effect on a Company's Balance Sheet Equation

question 97

Multiple Choice

What is the effect on a company's balance sheet equation when depreciation expense is recognized?

• A)This transaction affects only the income statement,so no change on the balance sheet will occur.
• B)Total assets and total stockholders' equity will decrease by the same amount.
• C)There will be no change in the total assets,liabilities,and stockholders' equity account.
• D)Total liabilities will increase and total stockholders' equity will decrease by the same amount.
• E)Without knowing the exact dollar amount of depreciation,the effect on the balance sheet cannot be determined.

---

Definitions:

Glass Ceiling

An invisible barrier preventing marginalized groups, often women and minorities, from advancing to higher levels of leadership or achievement.

Physical Disability

A condition that limits a person's physical functioning, mobility, dexterity, or stamina, impacting their daily activities and life.

Promotion

The advancement of an employee within a company to a higher position, which often comes with increased responsibilities and salary.

Competitive Advantage

The attributes or conditions that allow a company to produce goods or services better or more cheaply than its rivals.