Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

3. Accrual Accounting Concepts

Adjusting Entries: Depreciation

Financial Accounting

3. Accrual Accounting Concepts

Adjusting Entries: Depreciation

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Multiple Choice

Which of the following accounts are included in the journal entry to record depreciation expense for the period?

Debit Accumulated Depreciation; Credit Depreciation Expense

Debit Depreciation Expense; Credit Accumulated Depreciation

Debit Depreciation Expense; Credit Equipment

Debit Equipment; Credit Depreciation Expense

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Verified step by step guidance

Understand the concept of depreciation: Depreciation is the allocation of the cost of a tangible asset over its useful life. It reflects the wear and tear or obsolescence of the asset over time.

Identify the correct accounts involved in recording depreciation: Depreciation Expense is an expense account that reflects the cost of using the asset during the period, and Accumulated Depreciation is a contra-asset account that reduces the value of the asset on the balance sheet.

Determine the correct journal entry format: The journal entry to record depreciation involves debiting the Depreciation Expense account to increase expenses and crediting the Accumulated Depreciation account to increase the contra-asset balance.

Eliminate incorrect options: Debit Accumulated Depreciation and Credit Depreciation Expense is incorrect because it reverses the proper treatment of these accounts. Debit Equipment and Credit Depreciation Expense is incorrect because depreciation does not directly affect the Equipment account.

Select the correct journal entry: Debit Depreciation Expense and Credit Accumulated Depreciation is the correct journal entry to record depreciation for the period, as it properly reflects the expense and the reduction in the asset's value.