Which of the Following Is Correct

Multiple Choice

Which of the following is correct?

A) If a company fails to record depreciation expense, net income and expenses are overstated.
B) If a company fails to record depreciation expense, net income and assets are overstated.
C) If a company overstates depreciation expense, net income is overstated and assets are understated.
D) If a company fails to record depreciation expense, stockholders' equity, net income, and assets are understateD.If depreciation expense is not recorded, expenses are understated, and net income is overstated.Also, accumulated depreciation is understated because depreciation has not been added to it.Since accumulated depreciation reduces assets, understating accumulated depreciation will overstate assets.