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Q7(20)PSB

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Financial & Managerial Accounting
Found in: Page 160
Financial & Managerial Accounting

Financial & Managerial Accounting

Book edition 7th
Author(s) John J Wild, Ken W. Shaw, Barbara Chiappetta
Pages 1096 pages
ISBN 9781259726705

Short Answer

In the blank space beside each numbered balance sheet item, enter the letter of its balance sheet classification. If the item should not appear on the balance sheet, enter a Z in the blank.

A. Current assets E. Current liabilities

B. Long-term investments F. Long-term liabilities

C. Plant assets G. Equity

D. Intangible assets

20. Depreciation expense—Trucks

The correct answer is C, Plant assets.

See the step by step solution

Step by Step Solution

Definition of Depreciation

Depreciation is an expense that decreases the book value of any fixed asset. It is shown in the income statement as an expense and also adjusted from the relevant asset of the organization.

Reason for choice

As depreciation expense is related to the plant asset of the organization and shown by reducing the value of the plant asset, it should be disclosed under the plant asset section of the balance sheet.

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