Question

The adjusting entry for the depreciation of equipment will include:

a. Debit to Depreciation Expense, Equipment.
b. Credit to Depreciation Expense, Equipment.
c. Debit to Accumulated Depreciation, Equipment.
d. Credit to the Equipment Debit to the Equipment.

Answer 1

The adjusting entry for the depreciation of equipment involves debiting the Depreciation Expense, Equipment account and crediting the Accumulated Depreciation, Equipment account to allocate the cost of an asset over its useful life.

Step-by-step explanation:

The adjusting entry for the depreciation of equipment will include a Debit to Depreciation Expense, Equipment and a Credit to Accumulated Depreciation, Equipment. It is important to understand that depreciation is an allocation of the cost of an asset over its useful life. When recording depreciation for the period, an expense is recognized to reflect the use of the asset, and the value of the asset is correspondingly reduced through accumulated depreciation, which is a contra asset account.

Here's the journal entry for a depreciation expense:

• 
  
• Debit: Depreciation Expense, Equipment
• 
  
• Credit: Accumulated Depreciation, Equipment

By doing so, the financial statements reflect the expense that has occurred through the use of the equipment and the gradual reduction in value of the asset.