BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Debit depreciation expense RM2, 000; credit equipment RM2, 000
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Debit equipment RM2, 000; credit depreciation expense RM2, 000
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Debit depreciation expense RM2, 000; credit accumulated depreciation RM2, 000
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Debit accumulated depreciation RM2, 000; credit depreciation expense RM2, 000
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Detailed explanation-1: -Debit accumulated depreciation Rs. 2, 000; credit depreciation expense Rs. 2, 000.
Detailed explanation-2: -The basic journal entry for depreciation is to debit the Depreciation Expense account (which appears in the income statement) and credit the Accumulated Depreciation account (which appears in the balance sheet as a contra account that reduces the amount of fixed assets).
Detailed explanation-3: -The adjusting entry to record depreciation includes a debit to the Depreciation Expense account and a credit to the Accumulated Depreciation account, a contra asset account.
Detailed explanation-4: -Depreciation Adjusting Journal Entry: Depreciation expense is debited on the income statement and accumulated depreciation, a contra asset account, is credited on the balance sheet.