LO 4.3 What adjusting journal entry is needed to record depreciation expense for the period?Choose one answer from the options below.A. a debit to Depreciation Expense; a credit to CashB. a debit to Accumulated Depreciation; a credit to Depreciation ExpenseC. a debit to Depreciation Expense; a credit to Accumulated DepreciationD. a debit to Accumulated Depreciation; a credit to CashBackNext
Question
LO 4.3 What adjusting journal entry is needed to record depreciation expense for the period?Choose one answer from the options below.A. a debit to Depreciation Expense; a credit to CashB. a debit to Accumulated Depreciation; a credit to Depreciation ExpenseC. a debit to Depreciation Expense; a credit to Accumulated DepreciationD. a debit to Accumulated Depreciation; a credit to CashBackNext
Solution
The correct answer is C. a debit to Depreciation Expense; a credit to Accumulated Depreciation.
Here's the step by step explanation:
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When recording depreciation expense for the period, the first step is to debit (increase) the Depreciation Expense account. This is because expenses are increased by debits according to the rules of double-entry accounting.
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The second step is to credit (increase) the Accumulated Depreciation account. Accumulated Depreciation is a contra asset account, meaning it is paired with and reduces the value of the asset being depreciated.
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This journal entry does not involve any exchange of cash, so Cash would not be credited or debited.
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Therefore, the correct adjusting journal entry to record depreciation expense for the period is a debit to Depreciation Expense and a credit to Accumulated Depreciation.
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