Question

The adjusting entry to record depreciation does not directly reduce the long-lived asset accounts, such as Equipment, so that the original cost of the asset remains unchanged.A. TrueB. False

Answer 1

Answer:

A. True

Explanation:

Journal entry to record the depreciation is as follows

Dr. Depreciation Expense         $xxx

Cr. Accumulated Depreciation  $xxx

So, the long term asset account is not being treated in this entry. The Accumulated depreciation account is the Asset contra account which will be adjusted in the long lived asset account in the preparation of Balance sheet. It will not effect the long lived asset account directly. The cost of the asset will remain unchanged.