[amp_mcq option1=”Accumulated depreciation Debit and depreciation expenses Credit” option2=”Depreciation expenses Debit and accumulated depreciation Credit” option3=”Cash Debit and Depreciation expenses Credit” option4=”Depreciation expenses Debit and Cash Credit” correct=”option1″]
The correct answer is: A. Accumulated depreciation Debit and depreciation expenses Credit
Depreciation is the allocation of the cost of an asset over its useful life. It is a non-cash expense, which means that it does not affect cash flow. The double entry for depreciation is as follows:
- Debit: Accumulated depreciation
- Credit: Depreciation expense
Accumulated depreciation is a contra-asset account, which means that it is a deduction from the asset account. Depreciation expense is a non-cash expense, which means that it does not affect cash flow.
The other options are incorrect because they do not reflect the double entry for depreciation. Option B would increase the asset account, which is not correct. Option C would increase the cash account, which is also not correct. Option D would decrease the asset account and increase the cash account, which is not a valid double entry.
I hope this explanation is helpful. Please let me know if you have any other questions.