A company determines that depreciation expense for the year is $25 000, 10% of the cost of their non-current assets. The journal entry to record this adjustment would include:
A)a debit to accumulated depreciation expense for $25 000.
B)a credit to accumulated depreciation for $25 000.
C)a debit to depreciation expense for $2 500.
D)a credit to depreciation expense for $2 500.

Question

Quizplus · Accepted Answer

Depreciation expense is a contra asset account that is credited to reduce the asset value. Therefore, the entry should credit accumulated depreciation for the $25,000 depreciation expense amount. There is no need to debit or credit depreciation expense separately as it is already included in the $25,000 amount.

A Company Determines That Depreciation Expense for the Year Is