Question

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

B. Long-term investments

C. Plant assets

D. Intangible assets

E. Current liabilities

F. Long-term liabilities

G. Equity

2. Depreciation expense—Building

Short answer

The correct answer is C, Plant assets.

Step-by-step solution

Definition of Depreciation

The decrease in the value of any fixed asset due to normal wear and tear at the workplace can be referred to as the depreciation of the fixed asset.

Reason of choice

Depreciation is related to the asset’s value, so it should be disclosed in the balance sheet under the plant asset section to disclose the adjusted book value of the plant asset.