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IF accumulated depreciation is understated, what is the affect on net income?

April 26, 2017Accounting accumulated affect depreciation Finance net income understated

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IF accumulated depreciation is understated, what is the affect on net income?

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My understanding is if depreciation is undrstated your net income would be increased by the like amount that you would have saved on taxes had you written off what you were entitled to – I think. You would not have made more but you wold have paid less taxes on what you did show as earnings.