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.

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