Chapter 11, Problem 1QY

### College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570

Chapter
Section

### College Accounting (Book Only): A ...

13th Edition
Scott + 1 other
ISBN: 9781337280570
Textbook Problem

# Which of the following is the adjusting entry for depreciation on Equipment? a. Debit Depreciation Expense, Equipment and credit Equipment b. Debit Equipment and credit Depreciation Expense, Equipment c. Debit Depreciation Expense, Equipment and credit Accumulated Depreciation, Equipment d. Debit Accumulated Depreciation, Equipment and credit Depreciation Expense, Equipment e. None of the above

To determine

Identify the adjusting entry for depreciation on equipment.

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

Explanation

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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