Question

After the adjustment for depreciation has been​ made, the original cost of the​ equipment: A. decreases with a debit. B. remains the same. C. increases with a credit. D. is transferred to a liability.

Answer 1

Answer:

The correct answer is letter "B": remains the same.

Explanation:

Only when an asset is removed from a company's book, the account Accumulated Depreciation will be reduced. For instance, when an asset is sold, the asset 's accumulated depreciation is deducted from the Accumulated Depreciation account and the asset is removed from the books. The sale amount is recorded.

Then, adjustments in the depreciation of an asset will not vary the initial cost of the equipment.

Answer 2

The correct option is A. After the adjustment for depreciation has been made, the original cost of the equipment decreases with a debit

The reason why this option is correct is due to the fact depreciation is the allocation of a depreciating amount of asset on a useful life.

If the adjustment for depreciation is done. The initial or original amount of the equipment would fall. The cost on the balance sheet falls with the expense cost on the statement of income.

The expense amount would be on a debit entry.

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