Asked by Samuel Flores on May 16, 2024
Verified
Depreciation expense of $2,000.00 will cause:
A) Accounts receivable to be reduced by $2,000.00
B) Cash to be reduced by $2,000.00
C) Accumulated Depreciation to increase by $2,000.00
D) Accounts Payable to increase by $2,000.00
Depreciation Expense
An accounting method that allocates the cost of tangible asset over its useful life, reflecting how the asset loses value over time.
Accumulated Depreciation
The total depreciation of an asset up to a specific point in time, reflecting wear and tear or obsolescence.
Accounts Receivable
The amounts owed to a business by its customers for sales made on credit, considered a current asset on the balance sheet.
- Fathom the idea of depreciation and its repercussions on financial accounts.
Verified Answer
TN
Thu Ngân Bi?n Th?May 19, 2024
Final Answer :
C
Explanation :
Depreciation expense is a non-cash expense that reduces the value of a long-term asset over time. The Accumulated Depreciation account is used to track the total amount of depreciation expense taken on an asset over its life. As such, depreciation expense of $2,000.00 will cause the Accumulated Depreciation account to increase by $2,000.00.
Learning Objectives
- Fathom the idea of depreciation and its repercussions on financial accounts.