- CFA Exams
- CFA Level I Exam
- Topic 4. Financial Statement Analysis
- Learning Module 7. Analysis of Long-Term Assets
- Subject 6. Depreciation Methods
CFA Practice Question
The entry to record depreciation on long-term assets ______
B. decreases current assets and increases expenses.
C. decreases total assets and decreases earnings before taxes.
D. increases earnings before taxes and increases tax expense.
E. decreases total assets and decreases expenses.
A. decreases total assets and increases net income.
B. decreases current assets and increases expenses.
C. decreases total assets and decreases earnings before taxes.
D. increases earnings before taxes and increases tax expense.
E. decreases total assets and decreases expenses.
Correct Answer: C
User Contributed Comments 4
| User | Comment |
|---|---|
| kodali | doesn't B imply C |
| johasan | As for B, its addresses the current assets and not long term assets. |
| moneyguy | I thought so, too, kodali. Johasan is right. We have to read these questions carefully! |
| Inaganti6 | it's generally a case of what's what's MORE right. in this case long term assets are the issue not current assets and current assets are not subject to depreciation |