How is depreciation expense typically recorded in the books?

How is depreciation expense typically recorded in the books?

• A. Debit the depreciation expense account
• B. Credit the depreciation expense account
• C. Debit the accumulated depreciation account
• D. Credit the accumulated depreciation account

Answer: (A)

In accrual accounting, expenses increase with a debit. Depreciation is recognized as a period expense, so you debit the depreciation expense account to record the cost for the current period. The offset is a credit to accumulated depreciation, a contra-asset that reduces the asset’s carrying value on the balance sheet as depreciation accumulates over time. Debiting the accumulated depreciation would misstate both the expense and the asset value, and crediting depreciation expense would not correctly reflect an expense. So the standard recording is to debit depreciation expense and credit accumulated depreciation.

In accrual accounting, expenses increase with a debit. Depreciation is recognized as a period expense, so you debit the depreciation expense account to record the cost for the current period. The offset is a credit to accumulated depreciation, a contra-asset that reduces the asset’s carrying value on the balance sheet as depreciation accumulates over time. Debiting the accumulated depreciation would misstate both the expense and the asset value, and crediting depreciation expense would not correctly reflect an expense. So the standard recording is to debit depreciation expense and credit accumulated depreciation.