WAEC Accounting 2019 Paper

Concept:Provision for depreciation is an expense charged against business income.Explanation:Depreciation is not part of cost of goods sold.Therefore, it does not affect gross profit.It is shown as an operating expense in the profit and loss account.When the provision for depreciation increases, total operating expenses increase.An increase in expenses lowers the final profit after expenses.So, net profit decreases when the provision for depreciation increases.Answer:D. decrease in net profit.