MB-310 Manage Fixed Assets Practice Question
What is the consequence of selecting the 'Depreciation adjustment' transaction type in a fixed asset journal?
⚠ Common exam trap
Candidates frequently assume this transaction type changes the asset's acquisition cost or recalculates standard monthly depreciation runs, missing its specific impact on accumulated depreciation.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
It modifies the existing accumulated depreciation amount.
A 'Depreciation adjustment' is used to correct previously posted depreciation amounts. Selecting this type allows you to record a manual increase or decrease in accumulated depreciation for a specific period, ensuring the net book value is accurate. This is essential when an error is discovered in prior calculations or when tax regulations require a retrospective adjustment to the depreciation already recorded for an asset.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
It resets the total depreciation to zero.
Why it's wrong here
A depreciation adjustment does not reset the entire history to zero. It is an incremental entry that modifies the existing balance by the specific amount entered. Resetting the history would require complex and incorrect accounting entries that would violate audit trail requirements for fixed asset reporting.
- ✓
It modifies the existing accumulated depreciation amount.
Why this is correct
This transaction type is explicitly designed to modify the existing accumulated depreciation balance. Whether the adjustment is positive or negative, it reflects the corrected value in the general ledger and the fixed asset subledger, ensuring consistency in financial reporting after an error or change in requirement.
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It creates a new asset record.
Why it's wrong here
Depreciation adjustments do not create new assets; they are transactions applied to an existing asset master record. Creating a new asset record for an adjustment is entirely incorrect and would create duplicate records, making it impossible to track the asset's true financial history and depreciation lifecycle.
- ✗
It stops all future depreciation.
Why it's wrong here
An adjustment is a correction to past or current entries; it has no effect on the future depreciation profile or schedule. Future depreciation will continue to be calculated according to the established depreciation profile and conventions unless those settings are manually modified in the asset book.
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Last reviewed September 2026 · checked against the official Microsoft exam blueprint
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