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Question: How does the adjustment for depreciation differ from other deferral adjustments?
- The depreciation adjustment results in an increase to a long-lived asset account while the other deferral adjustments reduce asset accounts.
- The depreciation adjustment uses a contra-asset account rather than reducing the asset accounts directly.
- The depreciation adjustment increases a liability account rather than reducing an asset account directly.
- The depreciation adjustment is not a deferral adjustment, but rather an accrual adjustment.
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