Which of the following is the adjusting entry for depreciation on Equipment? Debit Depreciation Expense, Equipment and credit Equipment Debit Equipment and credit Depreciation Expense, Equipment Debit Depreciation Expense, Equipment and credit Accumulated Depreciation, Equipment Debit Accumulated Depreciation, Equipment and credit Depreciation Expense, Equipment None of the above

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College Accounting (Book Only): A ...

12th Edition
Cathy J. Scott
Publisher: Cengage Learning
ISBN: 9781305084087
BuyFind

College Accounting (Book Only): A ...

12th Edition
Cathy J. Scott
Publisher: Cengage Learning
ISBN: 9781305084087

Solutions

Chapter 11, Problem 1QY
Textbook Problem

Which of the following is the adjusting entry for depreciation on Equipment?

  1. Debit Depreciation Expense, Equipment and credit Equipment
  2. Debit Equipment and credit Depreciation Expense, Equipment
  3. Debit Depreciation Expense, Equipment and credit Accumulated Depreciation, Equipment
  4. Debit Accumulated Depreciation, Equipment and credit Depreciation Expense, Equipment
  5. None of the above

Expert Solution
To determine

Identify the adjusting entry for depreciation on equipment.

Answer to Problem 1QY

c. Debit Depreciation Expense, Equipment and credit Accumulated Depreciation, Equipment

Explanation of Solution

Adjusting entries: Adjusting entries are those entries which are recorded at the end of the year, to update the income statement accounts (revenue and expenses) and balance sheet accounts (assets, liabilities, and stockholders’ equity) to maintain the records according to accrual basis principle.

Record the adjusting entry for depreciation on equipment.

Date Account Title and explanation

Debit

($)

Credit ($)
  Depreciation expenses, Equipment XXX  
  Accumulated depreciation, Equipment   XXX
  (To record the depreciation on equipment )    

Table (1)

  • Depreciation expense (expense) is a component of stockholders equity and it is increased. Therefore, debit the depreciation expenses.
  • Accumulated depreciation is a contra asset account and it is decreased. Therefore, credit the accumulated depreciation.
Conclusion

Therefore, from the above given explanation it is observed that Option c (Debit Depreciation Expense, Equipment and credit Accumulated Depreciation, Equipment) is the correct answer and other options a, b, d and e are incorrect answers.

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Chapter 11 Solutions

College Accounting (Book Only): A Career Approach
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