Multiple Choice
A business owns an automobile that has an estimated useful life of five years. What is the effect on the accounting equation of recording the using up of the auto for one year?
A) Assets are decreased and equity is decreased.
B) Assets are decreased and liabilities are increased.
C) There is no effect, provided the automobile was paid for at the time of purchase.
D) Assets are increased and equity is increased.
Correct Answer:
Verified
Correct Answer:
Verified
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