Question

What would be the adjusting entry to record depreciation each period?

	A.	Debit Equipment Expense, Credit Equipment
	B.	Debit Depreciation Expense, Credit Accumulated Depreciation
	C.	Debit Depreciation Expense, Credit Equipment
	D.	Debit Accumulated Depreciation, Credit Depreciation Expense

Answer 1

Adjusting entries are simply journal entries which are recorded at the end of the period so that the organisation follow the matching concept. For recording depreciation, we usually debit the depreciation expense account and credit the accumulated depreciation account.

This depreciation expense is shown in the income statement and we can claim it as an expense for the period while accumulated depreciation are shown in balance sheet and it reduces the cost of asset.

Hence, Option B is the correct answer.

SUMMARY:

Depreciation is a business expense. It is recorded at the end of period. The entry will be as debit to depreciation and credit to accumated depreciation. So option B is the correct answer.