Which of the following is NOT true about depreciation expense?

The assertion that depreciation expense increases the asset's book value is incorrect. In fact, depreciation is an accounting method used to allocate the cost of a tangible asset over its useful life, effectively reducing the asset's book value on the balance sheet. Every time depreciation is recorded, it reduces the asset's value to reflect the consumption of the asset's economic benefits over time. This reduction in the asset's book value is essential for accurately presenting the company's financial position and ensuring that the asset's carrying value reflects its actual worth as it ages.

The other statements are true in terms of depreciation expense. It indeed reduces taxable income since the expense lowers the profit reported for tax purposes. Depreciation also represents the wear and tear of an asset, acknowledging that assets lose value as they are used. Lastly, it appears as an expense on the income statement, impacting the net income reported by a business for a specific period.