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Actually it decreases net profit which eventually become part of capital. So we can say it decreases capital. Option D.
Option D is the right answer.
D) Capital. Since assets are capital expenditure reduction in them will simply imply a reduction in capital. Regarding retained earning on the other which is added to stated capital, depreciation expense reduces such amount too which will intend reduce capital employed.
My answer is D. Capital.
Recording depreciation will decreases asset through a credit to accumulated depreciation and increase to depreciation expense thereby decreases capital.
Option D and A both are related terms, when it (Depreciation) hits on net profit then capital decreases and eventually liability would be decreased
Correct Answer is A) Liabilities Depreciation decreases liabilities.
the correct answer is D - Capital
