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A company's depreciation expense for the year is $65,000. What is the effect on the net profit?
  • a)
    Increase by $65,000
  • b)
    Decrease by $65,000
  • c)
    No effect
  • d)
    Increase by $130,000
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
A company's depreciation expense for the year is $65,000. What is the ...
Depreciation expense reduces the net profit because it is an expense.
Effect on Net Profit = Gross Profit - Depreciation Expense
Effect on Net Profit = Decrease by $65,000
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A company's depreciation expense for the year is $65,000. What is the effect on the net profit?a)Increase by $65,000b)Decrease by $65,000c)No effectd)Increase by $130,000Correct answer is option 'B'. Can you explain this answer?
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