Which of the following statements accurately describes the nature of the depreciation expense account's balance?

Which of the following statements accurately describes the nature of the depreciation expense account's balance?

• A. Depreciation expense has a credit balance.
• B. Depreciation expense has a debit balance.
• C. Depreciation expense has a zero balance.
• D. Depreciation expense can have either a credit or debit balance.

Answer: (B)

Depreciation expense, like other expense accounts, increases on the debit side. When you record depreciation, you debit the Depreciation Expense and credit Accumulated Depreciation (a contra-asset on the balance sheet). This setup means the Depreciation Expense account naturally carries a debit balance, reflecting the cost recognized for the period. It would only show a credit balance in unusual situations (or a zero balance if no depreciation has been recorded yet). So the correct description is that depreciation expense has a debit balance.

Depreciation expense, like other expense accounts, increases on the debit side. When you record depreciation, you debit the Depreciation Expense and credit Accumulated Depreciation (a contra-asset on the balance sheet). This setup means the Depreciation Expense account naturally carries a debit balance, reflecting the cost recognized for the period. It would only show a credit balance in unusual situations (or a zero balance if no depreciation has been recorded yet). So the correct description is that depreciation expense has a debit balance.