Indicate how each event affects the elements of financial statements. Use the following letters to record your answer in the box shown below each element. You do not need to enter dollar amounts. (Note that "Not Affected" means that the event does not affect that element of the financial statements or the event causes an increase in that element that is offset by a decrease in the same element.)Increase = IDecrease = DNot Affected = NABelvedere Company recognized $2,500 of depreciation expense on a delivery van.AssetsLiabilitiesStk. EquityRevenuesExpensesNet IncomeStmt of Cash Flows???????
What will be an ideal response?
(D) (NA) (D) (NA) (I) (D) (NA)
Recognizing depreciation expense decreases assets (because it increases accumulated depreciation, a contra asset account) and stockholders' equity (retained earnings). It increases expenses, which decreases net income. It does not affect the statement of cash flows.
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