How to record depreciation journal entry?
Understand the Problem
The question is asking how to properly record a journal entry for depreciation in accounting. This involves understanding the general ledger accounts used in recording depreciation and the steps to make the entries correctly.
Answer
Debit Depreciation Expense, Credit Accumulated Depreciation
The final answer is to debit the Depreciation Expense account and credit the Accumulated Depreciation account.
Answer for screen readers
The final answer is to debit the Depreciation Expense account and credit the Accumulated Depreciation account.
More Information
Depreciation helps to allocate the cost of a fixed asset over its useful life, making it an essential concept in accounting. By using the contra asset account, accumulated depreciation, the balance sheet reflects the decrease in the asset's book value over time.
Tips
Common mistakes include posting the entry to the wrong accounts or miscalculating the depreciation amount. Ensure that the correct accounts (Depreciation Expense and Accumulated Depreciation) are used and verify calculations with an amortization schedule.
Sources
- How to Book a Fixed Asset Depreciation Journal Entry - FloQast - floqast.com
- The accounting entry for depreciation - AccountingTools - accountingtools.com
- Depreciation Journal Entry | Step by Step Examples - WallStreetMojo - wallstreetmojo.com
